My understanding is that if you’re not licensed, you can’t originate more than 3 seller-finances/year, and you have to make sure buyer can repay, fully amortizing, and restrictions on ARM.

Recently, my tenants have expressed concerns of people hanging out in the front of their units, creating some uneasiness - to the point where they want to exit their lease for safety reasons.

They look for basic health and safety issues, and the Section 8 office has a phamphlet with their requirements. 

Hi Paul,Charlotte is considered a good market for house hacking due to its demographics, safety, and quality of life.

There are many buildings with systems reaching the end of their life - Galvanized hot water risers, leaking vent stacks, aging window systems, outdated elevator and fire safety equipment.

Every time I hear 1% cash flow I stab myself in the arm with a pencil - my arm looks like Swiss cheese now....hahahaSince you're in Gilbert, why not invest locally where you can walk properties and you know that area?  

My interest rate, if I had financed it would have been +7%+, unless I did an ARM. 

The tenant threatens to get lawyers, my concern is their safety, but I can’t get any justification to make improvements to the property for security.

The only issue really is that this is not considered an "arms length transaction" so if you were going to a bank they may more hoops to jump through or lend less than they would in an arms length transactions or even pass on it.

Should I go for a 5-year ARM, or DSCR, or try to get a long-term ARM or DSCR loan?