Any agreement you have with the seller does not hold any legal sway with the tenants.Here is my estoppel:1.

The smaller local banks that I have talked to are reluctant to work with out of state investors, probably due to the added legal cost of tracking them down if something goes wrong.   

We have one person looking to invest with us, one family member willing to take out second or HELOC for the remainder of the funds, another wanting to do most of the work, and myself that would run the money, and day to day business operations, design ect.

Now since the landlord had undertaken renovations to create a low allergen place to live, marketed their building as such - being forced into accepting an ESA would "fundamentally alter the nature of the services provided" and thus allow them to legally decline the request!

At a minimum you'd want to work with a mentor or (preferably) attorney that is experienced in distressed property matters and well-aware of the many legal pitfalls. 

I know that it is legal, but is there a problem with me telling the tenants right off the bat that they need to sign a lease agreement?

@Ian MiddletonAttend the biggest networking event in Houston next Wednesday, Sept 19, and you will meet hundreds of local investors, along with vendors.It's a loaded question, but here is the short answer:For legal liability protection, if you need one, is an LLC.

@Manuel Martinez Yes presuming ground leases are legal in your state. 

You should plan on 20% down, closing costs, legal etc. and probably another 10K in reserve funds.You should probably spend more time studying finances, real estate and your local area to get a more complete education on investing.

The property was legally converted from a SFR to a duplex at some point in time.