And if the lender foreclosed on the property a few years ago, but still hasn't tried to sell it, then it could be because there's an issue with title, or perhaps there's a legal battle taking place with the previous owner.

It's caught some sensitivity a couple times where I otherwise wouldn't have realized, but nothing major. 

Memphis is a major transportation and logistics hub, home to FedEx’s global headquarters and a key center for shipping and distribution.

The issue I am facing is that the property is zoned for residential use only, and I am interested in renting out both the main house and the pool house as separate units.

They told you it's not allowed, so don't push the issue.

Those seem more than fine, the biggest issue with condos is trying to get a handle on the association itself, do they have proper reserves?

does not ring a bell.. in my day there was my company and Southern investments as the two major fix and flip lenders in Jackson MS.. 

To address this, we agreed that I would work in the business for six months to verify the financials, which so far align with his POS system.My main issue is that at 23, I don't have strong financials to get a conventional loan at 75% LTV with a ~7% rate, and the seller's lack of financials complicates bank approval.

It has appreciated almost 2.5X of the original purchase price, however the cash flow is typically $25 in the red every month sometimes more with maintenance issues. 

You might run into issues getting financing on it