You'll probably want to do some more digging on these tenants before accepting them.6 adults and 4 kids in a 4/2 home is a red flag itself.

It will help align your life goals and strengthen what you already have or expose any flags that might cause trouble if someone wants to divest...

Have you verified with your builders risk carrier that you will have coverage if there’s a claim and the renovation is completed without proper permits?

Some carriers won't allow the landlord to be named "additional insured" but you can at least be named "additional interest," which won't cover you under the policy, but it will ensure you are notified of any changes or cancellation of the policy.

And thats a red flag. 

Most carriers don't want to insure a building as a normal rental home if there is a possibility of commercial use, or even if it's set up to possibly be used as commercial even.

What are the red flags and concerns?

This  may not be possible when the fact pattern is so egregious the carrier sees through the tactic.

Compound that with a squirrelly seller and tenant, and you’re not just seeing red flags, you’re being beaten about the head and shoulders with them. 

I am working on a website right now that will highlight data from the SEC for those funds that have red flags.