If there is a ruling in favor of the landlord they can apply for a red tag and setout with the bailiff.

If you follow all the rules you will avoid any gain on the property you sold, remain invested in productive real estate, and receive the whatever tax benefits remain in owning a house after any tax reform is completed.This would entail many assumptions and an after tax cash flow analysis but I think the best and worse case scenarios would give you some comfort in making a decision. 

After you factor in maintenance, than might drop to $0, with the tenant only paying off your mortgage as a return.Keep reading the blogs and forums on BP and you'll see a lot of references to the 1% rule, which means the rent received each month should be at least 1% of the purchase price of the home. 

I am looking to repeat the process on a multi family house in the near future but the owner occupied rules are throwing me off.Thanks again!

Yep, no restrictions on that.

Part (a) seems to overly restrict you from going after the agent if they make a mistake that causes you a loss. 

Such purchase can be financed, but the loan must be non-recourse according to the IRS rules. 

Based on 50% rule and Cap rate, it points to not being a great deal.

I can't speak to any hard and fast rules about material errors (my tax business is deliberately and selectively very small), but I would absolutely agree that encountering a material error (especially one that should have been easily caught before you ever saw it) every year is too much.

Out of FL...her state laws rule.