Padsplit residents can cause problems with neighbors and other residents because many have substance abuse and/or criminal histories. 

None of my clients do the "co-GP", its a very thin facade...light on substance usually will land both parties under federal trouble...

If that were the case - would there be harm?

isn’t what they should be focused on and I’d argue you’re doing more harm than good. 

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesWe recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

Most recently overseeing the operations of an organization that provides sober living to those seeking recovery from substance use disorder.

The fact that it has harmed (scratched) another tenant may allow you to have it removed. 

Your best bet is to ensure that there are no material modifications that would in any way harm or even moderately delay the ability to rent it out and qualify as a normal SFR (one lease, one family) or sell on the market to an owner-occupant

Huge plus side is it’s free so if you hate it no harm no foul.  

This was not disclosed to me before the purchase and now I'm finding myself in a situation that could end in serious financial harm to myself.