Because they are asset based lenders, they will allow an arrangement such as this.My suggestion is to get the portfolio taken down in this way and then refinance to either individual loans or a portfolio loan to get it off the hard / private money. 

Positioning is a key part of all this too - the lender or financier may be in first lien or 2nd lien position or they may have other arrangements with the borrower. 

I think the root cause of the stress over the repair is that I don't trust tenants telling the truth given he lied about a long term lease and actually only looked for a flexible arrangement until he found a house to buy.

You can set property facts filters to discover comps that more closely resemble your own home’s features.All the best!

I also recommend treating this loan with your stepdad as a true business arrangement, should you choose to move forward.

Either the lender blesses the arrangement or they don't.

If investing and residing in a small multi-family in either of these markets appeals to you BUTyou still can't get all the down payment or other money together(or you'd like to spread the responsibility and risk with a partner with different expertise),we should talk.I'll be in Phoenix in August and Vegas in October (and again late January-early Feb.) and am open to exploring such arrangements.

Once the list is mostly complete, start arranging them in the order they will occur in the life of a lease (marketing, application screening, collecting deposit, signing lease, moving in, collecting rent, maintenance, etc.)

The scratches are very noticeable from about 15 feet away and don't resemble anything even close to standard wear and tear, but agreed, perhaps not malicious.

Are there any verbal agreements or arrangements between the current Landlord and Tenant?