They cash flow as-is, but due to them not being maintained there are a lot of updates that are needed just to comply with Texas Property Code (safety issues, etc.). 

He understood and will take care of it.What if he doesn't comply and I get fined for it?  

If you intend to stick to friends and family, there is probably an exemption in your state and you don't have to comply with certain regulations.

However, it is DANGEROUS to act as if it doesn't exist, and/or use dubious legal theory to try and not comply.

If you accept, the entity that you are requesting information from has 30 days to comply and fulfill your request from the date all monies are paid and you have answered any/all questions they have about your request.If they deny your request, you are more than welcome to submit a modified request.

The law applies to the type of property, not to who buys it, just because you are in the business and while you might consider you financing a commercial venture, does not make it a commercial loan, financing any property that is used or to be used as a residence must comply with the SAFE Act, unless the Seller is exempt as an owner occupant (not the buyer) and they do no more than the set number allowed under HUD guidelines with the applicable state, so far ranging from one to five deals a year.Joseph, you might adjust your advertising.

I'm also interested in duplex as a buy and hold, we'd live in one half of the unit to comply with FHA, and once the year is up we would plan to move to another duplex.

KY § 383.585 Disclosure.(1) A landlord or any person authorized to enter into a rental agreement on his behalf shall disclose to the tenant in writing at or before the commencement of the tenancy the name and address of:     (a) The person authorized to manage the premises; and     (b) An owner of the premises or a person authorized to act for and on behalf of the owner for the purpose of service of process and receiving and receipting for notices and demands.(2) The information required to be furnished by this section shall be kept current and this section extends to and is enforceable against any successor landlord, owner, or manager.(3) A person who fails to comply with subsection (1) becomes an agent of each person who is a landlord for:     (a) Service of process and receiving and receipting for notices and demands; and     (b) Performing the obligations of the landlord under KRS 383.505 to 383.715 and under the rental agreement and expending or making available for the purpose all rent collected from the premises.

You need to do this to comply with federal tax law.

Once you own the property, I feel the only thing you can do is comply.