You might also be a good candidate for a small boutique hotel, an operator looking to retire will often entertain seller financing on fair terms and you could likely qualify for a SBA loan to help with your vision. 

I thought of getting a commercial loan or getting a loan through an LLC.

It was a lot to mention in the post but to make it more difficult this is a VA loan.

Hi Carline,I know there are down payment assistance programs for properties 4 units or under but anything over that is considered commercial and to my knowledge there are no loan programs out there.I'm not sure if the down payment assistance programs are still active but I can find out if you'd like!

is that just a different type of loan?

Nicholas, as long as you live in one of the units for at least one year, then you should qualify for an FHA loan.

Which of the two, SBA or commercial loan, offers the best terms?

Maybe see if you can get a HELOC over and above the first loan (although those are hard to come by these days). 

Best to invest the money you would spend on pursuing these claims on better management/tenant screening or building improvements that may attract better qualified tenants.

. - in this case, I will have more time to shop around for better loan terms/rates etc.