I'd accept let them know you understand, you'll wave late fee for September, ask how much they can pay.. if it's at least 50 to 60% I'd say Ok and  your next payment will be on XXX date. and find out how soon they expect to return to work..

If you uncover that answer, it may shed some light on the investment (maybe it's good info and it satisfies my skeptical approach)I have found the biggest three seller motivations (with landlords) are:1) Tenants are subpar and current owner is tired of managing (in this, you're inheriting headaches, eviction, and much higher repair costs than you expect). 2)  An estate took over and just wants to get it gone (in which case there is probably a back balance owed that needs to be flushed out along with a general lack of property knowledge). 3)  My personal favorite: the Owner bought via tax sale deed (and therefore does not want to be a landlord, just wants his investment + reasonable return).If everything checks out, it sounds like a great deal bud.  

Sure, you could probably find an investor willing to do that if you make the return % attractive enough for them.

The 2-6 plex units were dragging the return down to 2%.

You do not want to end up in a situation where you are in court, your rental is ruled illegal, and you are forced to return rent to your renter.

Multi family will probably make your return on investment better and it'll probably be easier for Property management.

Nothing beats knowing the neighborhood as far as understanding returns, rehab potential, best areas, etc.

I don't mind he has promised good returns but I never done this.

Am I able to charge for the late return of keys, or is it even considered late?

His return 27.2% per year before taxes.