@Harry Williams and @John Underwood, if it is obvious people will eventually redeem and I will never get the property, I send a strongly worded letter by regular and certified mail telling them I have the tax sale rights including the right to possession.

The bank views a year lease as less risk for them and a form of stability which as investors we know doesn’t equate to security in the real world .

It is our intention to keep adding rentals to our portfolio  for a while, as we are well-suited to owning and maintaining buildings, and we really enjoy the process of buying ugly properties and then transforming them into something that can bring us a really regular income from renting them.  

As security for the seller, I would then of course put her in 1st position lien holder with a mortgage.

There's a lot of red flags on this and I would personally move on.If you still want to pursue it after looking at their background and credit report, might I suggest  a higher security deposit or pet fee up front.Still, there's always better tenants out there for you.

Make sure you check your local/state laws on late fees and security deposits.

Orkin just pushes them in the walls, but doesn't eliminate the problem, whereas other bug companies will go through and actually try and kill them vs. regular services.   

The difference is, with a regular amortization loan, your payment remains constant throughout the life of the loan.Make sure that Bank Midwest HELOC rate is fixed.

You're better off asking your bank.I'd think that because they are individual parceled, they wouldn't be treated as a regular 16 unit MF for tax or any other purposes. 

These days many short sale if available cost more than regular sales.