I was thinking from a legal perspective I would need to perform an OFAC check which is automatically done through my background check system(https://www.tenantbackgroundsearch.com).

My question here is, is it possible to raise private money and syndicate that money into a legal entity that would then join as a member of a separate LLC for the purpose of contributing capital to fund new construction?

If you have PITI the TI is in the monthly debt service payment.

You do have every right to pursue a legal claim against the seller's & seller's realtor(s).

The answer is no,plain and simple.If he wants to run a home based business so badly,he can buy his own house and use his own insurance and take his own chances with city code enforcement.This is a legal disaster waiting to happen if you allow it.Find better tenants if they threaten to move,you'll sleep easier at night.

Is this legal to make a decision based on what is found on social media about applicant? 

Insurance is going to be your main issue, as it is costly and having been on three boards, we were risk averse to changing it or losing it as I recall insurers bringing up details from bbq to pets, etc. and when you have a claim, really it seemed a struggle, and if they can get out of paying they will..even got dropped once...Maybe have the master policy professionally examined to see what is allowed and, worst case, explore if you can get legal help to work out a mechanism to hold the association harmless (be it your own policy, plus umbrella, and maybe indemnify the association for any claim)....some great advice here and some firms may be more willing to write the policy.

Is this legal?

The deal is as follows: Eightplex in Hickory NCAsking price $210,000 (trying to get it down to 150-170k, but am using 210k for the numbers) Gross rents: $2,900/month or $34,800/year (Between $330-400 a door) Tenants pay all utilitiesI am requesting a 1040 schedule E and the T12's from the seller, but for now am forced to use the 50% rule. using that, operating expenses are $17,400 NOI: $17,400Cap: 8.28 Debt Service: $8,700Equity Dividend rate: 16.5% The area isn't great or terrible, probably a C or C+ area.

Would this effect my debt/income ratio?