I suggest checking in on the assorted laws your working to violate, that would be a good starting point. 

We did get negotiate money from them to help with roof repair, but now know they were not honest on their disclosure.Our inspector missed code violations, HVAC issues, pipes that had been worked on and issues hidden that had occurred while sellers lived in the house, signs of drainage and water damage inside the house that had been painted over, completely blocked dryer vent...and we are finding more daily.We have had the house looked at by a structural engineer and HVAC techs that has told us we need thousands (likely tens of thousands) of dollars worth of repairs to make this property able to rent and come up to code for rental. 

In my case the only two that apply are no smoking $300 violation fee and $125 lost elevator key fee.

Any RE agent advising to you that this is an option that you should exercise in order to better afford a home should have their RE license revoked for violating their fiduciary responsibility to you as a client.

He would be in violation of the lease and would need to be evicted.

I believe that’s a Fair Housing violation too so it stands for all states.  

On that note, I'm also wondering if I'd be violating anything in my current loan (30 yr, fixed rate conventional financing on 2-4 unit investment property).

If the loan gets called, you can not force the sale of the property to cover the wrap unless the borrower has violated the terms of the agreement.

Do not tell him where since he is not the owner on the main one and because he took disbursements in violation of the LLC agreement for the lower one. 

Figure out how to inspect and document, what to do if there's damage or violations, etc.I could go on.