Our CPA insisted that we need at least 20 units to minimize risk.

You insist on "detailing" your way out of ethical practice.

I suggested they just be the hard money loan for this property, but they are insisting on being 50/50 partner, theyre willing to put up 100% of the money but as its a brrr they will get it back in 6 months -  The other person who wants to run half way houses in the properties and also be 50/50 partner.

In my experience, inherited tenants don't usually work out for one reason or another.One deal we did springs to mind after reading your post.......we bought the house off the MLS from an OOS investor with a sitting tenant that has been there for many years (I don't know how many, but a lot).When we first took over we took care of a great deal of deferred maintenance, but we did not increase the rents. the tenant was paying about $600 if memory serves, and market rent for that house is $750 (I know because we leased it again last month).Anyway.... back to the original tenant...She always paid late, and was very insistent that it was OK to do so because that's what the old landlord let her do.This back and forth went on for a while, and in the end she left under  cloud, angry at us for insisting that she pay on time.I've had similar situations time and time again with inherited tenants, and it seems that the closer their relationship with the previous landlord, the more quickly they'll end up leaving.

Just a question... are the ones who are most fervently defending this market and insisting that it can't crash the same ones that would be hurt the most if it did?

My banks rep insisted they sent it and called the wire department on his cell phone and relayed to us to tell them to "Look closer".

Most all the big real estate companies have their own way of doing things and they insist on your following their lead.  

I can only speak for the Multnomah County Recorders office, but as a green newbie myself, they were very polite and nearly insisted on helping me when I suggested that I'd figure it out myself.

Perhaps, due to the state of their house, the price of their non-renovated home on the market would only bear $460k even though they insist on listing it at $500k. 

I would, however, insist on a signed estoppel certificate from this tenant prior to closing.After closing, I would give him proper notice of termination (based on his lease), and then present him with a new lease for the market rent amount (or a little less).