I’ve built strong relationships with agents, contractors, and other investors in the area, and one of my contacts informed me that the owner was considering selling but hadn’t listed the property yet.

Either way you are in great shape to be a property OWNER!!!!  

@Chris Seveney The types of leads I'm targeting are absentee owners, vacant properties, pre-foreclosures, tax delinquencies, and probates. 

I noticed that the previous owner let them pay half the security deposit and the other half later, which is a red flag.

They were referrals and the business started to grow simply because I had a competent team that was responsive and looked out for the owners' best interests.

It is zoned single family but since the previous owner is using it as a rooming house a few things look different that I am worried about the appraiser not passing:Outside doors for each room with locks.The only common area is the kitchen, no dining room, living room, etc.The rooms consist of 5 bedrooms, 1 kitchen, and 2 bathrooms.Each room has a bed and a small drawer which I am thinking of diassembling before the appraiser comes.Would I have a problem with this?

Your interest rates are low. 8.5% is around the "market rate" for owner finance buyers right now...30-yr, fully-amortizing2.

Property owners can apply for an STR permit now, before the effective date of the new plan, and can operate thereafter (i.e., be grandfathered).

Seller will owner finance the portion she can.To those who have been walking down this path, how are you funding these projects?

The owners refused my advice to reduce price and they both sat vacant for months.