We figured that chances were very low of encountering a burned down condo or one with extreme structural issues.

Our HOA documents clearly note that any structural change or change to the exterior of the home requires written approval of the trustees.

If you are just doing open house tours, you don't need to shell out a ton of money for an inspector to follow you around. 

This is where you propose a long term deal structured as a payment to him from your positive cash flow. 

I know federal law only says structures built  before 1978 and this was built in 1986, however when it comes to safety and your family, I understand you cannot be too careful.Please let me know when to expect this testing so I can arrange for a representative to be onsite.Thank youNOTE: Never send anything like that to someone on a house before 1980ish. 

The last thing that comes to mind is a hybrid debt instrument but that could get a little tricky.You aren't going to get any legal advice on here so if you are legitimately concerned you will want to talk to an attorney about your specific concerns and they will let you know if you can structure around it.

Since these are friends, you could sit down and have an open dialogue about potential ways to structure the deal.

Bank owned, foreclosure, short sale - doesn't matter how the sale is being structured because that affects the seller, not you (the buyer).  

One of our originators wrote an article about this a few weeks back on this exact topic. https://www.corevestfinance.com/commercially-structured-loans-for-real-estate-investors/"To reset this limit, blanket mortgages wrap all of an investor’s residential assets into one commercial loan that will be held in an LLC vs. 10 or more different residential loans – thereby wiping the 10-count from their personal credit report and setting it back to zero.

Sara, Its not code to insulate between the floors (excluding along the ends, the outside shell has to be insulated).