If high rates are your primary concern, you could potentially look around for a similar arrangement.

What sort of issues are we concerned about?

If the answer to both added questions would be "yes", then you have a potential goldmine here.Combining the seller's concerns, and the reality of a big down payment being a negative to the seller (see Q: 1), you should be able to set the terms, with a lower DP, and controlled interest rate, to have this property CF and,...be able to sell the package to another REI down the road,...as long as you buy this using an LLC (a new one). 

Quote from @Eli Ling: thank you, what do you think of this email:I understand your concern about the ceiling leak and your assumption that it might be coming from my apartment.Since we both want to resolve this issue, I suggest contacting the HOA to involve a neutral third party who can determine the actual source of the leak.

If you’re still concerned, you could consider installing programmable thermostats or low-flow fixtures to help control costs without relying entirely on tenant behavior. 

The demand for affordable, shared housing is strong here, so filling vacancies shouldn’t be a major concern.

I am however concerned about the difficulty in having in obtaining a return of funds I’ve invested in the AHP Servicing fund.

I wouldn't let any concerns about this deter you from investing in Section 8 (or other) properties.

What alternative method(s) would you recommend for beginners? 

Here's what I've learned:Inspections Are Non-Negotiable: Always get a full inspection, but don’t stop there.Plumbing & Sewer: Have the plumbing and sewer systems checked specifically, as these are common problem areas in older homes.Electrical System: If the inspector flags any electrical concerns, bring in an electrician during the inspection phase for a detailed evaluation.