I have not done it personally but have some insight, maybe my reply may boost your post to someone with more experience in it. 

@Erica King Sounds like this is more of a personal budgeting concern rather than a real estate one.

Apparently, the person I am under contract with was managing the estate of the actual owner who recently died.  

Ultimately, clear communication and expectations handled in a respectful manner can avert any issue.

A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.7.

$6k tax.Ins,hoa, not to mention utilities . took out a HELOC off of our personal home ( res.worth $900k, and a 260sq ft studio, mtr. $1450 mo.) for$ 220,000 for the deposit.

@Lauren MerendinoI strongly believe that your chosen market should be somewhere that you can go to in person / have strong personal knowledge of / have family or a network in already.  

I 100% agree with the intent aspect and that is an important premise, but the fact is in this particular situation intent for it to be personal use has been confirmed (by way of a public post).

I'd personally sell the townhouse (doesn't sound like it cashflows or would make a good rental property) - you may have no capital gains if you have lived in it the past 2 out of 5 years - I believe the first 250k for single filers is exempt from taxes and the first 500k for married couples.

Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.3.