I am also following your opinion and analysis as well.You were said before that you met this hedge fund guy (or whatever) that their AUM is hundred times more than your AUM correct, but while you able to manage your portfolio and management, their portfolio is all at red. 

It is seen as a red flag by a portion of the parents.

Any additional due diligence questions or red flags I should look out for. since its my first time to invest in multifamily3.

Both the daughter and Dad have excellent credit history but feel this is a red flag. 

More secure and stable than an STR (also less competition) but you aren't in the red like you'd be with an LTR. 

They city will red tag it and require you to upgrade everything and get a Certificate of Occupancy before you can rent it.

Heck go to the casino and put it on roulette wheel of black or red. 

MInut has a low average review (mid-3s I think) on Amazon which is a bit of a red flag. 1 per room at a total of $60/month sounds excessive for something that is not likely to be a common occurrence. 

Major red flag for me that they won't give you one.

So be careful and make sure you interview the Expediter and that they have had success in obtaining the Letter of No Objection.As far as evidence that you need to gather, look up your buildings TAX Class.You will find it here: Building Information SearchHere you will see something that looks like this:NOTE that while this is a Dept of Buildings Web Portal, what I have circled in RED is the Department of FINANCE Building Classification.You may not have a CofO, but the Dept of Finance maybe taxing you as a 2 Family.