I have heard of few troubling stories of bad tenants or bad neighbors snitching on the landlord for one reason or another and the stove is subsequently taken away and the kitchen ripped out. 

I think you need to separate in your mind the note purchase and any potential subsequent modification. 

Since they contacted you on Airbnb, take at least the first month's payment there, then subsequent months you can go off platform. 

However, they were on a nonsmoking lease (with the prior owner as well as the new lease with us), and we discussed the smoking issue with them when we purchased the property last year, and also sent a subsequent written warning which we received back with a very hostile and crude reply.

The goal: Ensure the property’s condition hasn’t changed since your initial or subsequent visit, that any agreed-upon repairs have been made and that the terms of your contract will be met.

I second the suggestion to be very familiar with landlord/tenant statutes for your state.Check out some of the other landlord forums on the internet; there are some very helpful ones out there.Be aware of the process of when to initiate a Pay or Quit notice for tenants who are late on their rent and DO this as allowed by your states laws; perhaps one of the biggest issues many  landlords have is letting things "slide" in terms of not initiating this when tenants begin to fall behind on their rent. 

If this helps...when I first started out I had this "dream" of saving older homes in a nearby neighborhood that was teetering on the brink if sliding into the muck of human existence (so to speak). 

You need the experience to help you not only with subsequent deals but obtain better rates.

When trying to get a subsequent loan for a rental property, would they just use the actual PITI from the primary home loan, or would it still be the PITI assuming 2% higher rate?

You'll get a rough guess as to cash-flow per property and a timeline to acquire subsequent properties.4.)