The win for them would be a high cash down payment for them to purchase their new home, but i assume they would end up still with a small payment covering the difference on their current home which might affect their ability to get a new mortgage.

This can now covers your Loan payment.

I would say that urban flight would only work if there are jobs in those mid-western cities with pay enough to cover housing costs at 30-35% of income.

From the seller, we got credited the tenant's security deposit, prorated rent for June, and last month rent (which will cover July). 

It sounded like you would have enough to cover either loan type and that's why I wanted to bring up the conventional option.Keep in mind under both options you will need to be a mini-project manager. 

I want to make sure that I am cover, in the event that something happen.

They said that they can't prevent me from renting the unit even if I don't abate the lead immediately, but it's unclear what would happen if I refused to abate it in the way the report wants.For the record, I'm not looking to be a slumlord who knowingly rents houses covered in lead paint.

A few things to keep in mind when owning the property and allowing this is to cover yourself with the right insurance.

Lease agreement should cover the majority of Landlord-Tenant issues5.

Then 100% of rehab could be covered.