This tenant is going to be a nightmare and it would be best to start over.

Best way to be. 

Portfolio income, such as interest does not have any preferential tax rates so it is taxed at your ordinary tax rates.For the average taxpayer, interest income will not be considered active or passive which the original poster is trying to claim(as passive income).You, from my understanding, are in the business of originating and buying notes.

Have a question that has been drilling my brain all weekend, it will be great to hear advice on what the best course is from experienced and knowledgeable people.

A 30-year fixed rate mortgage is currently sits around 6.15% interest:All else being equal, lower mortgage rates reduce the cost of ownership and, thereby, allow more people to afford to buy.

It is proven high end and has some of the best views - it's truly a rare opportunity as developable land disappears quicklyIt's 8 prime lots (around $1m a piece) and half are multi family (2 duplex and 2 triplex). 

Private money lenders work best on rehabs given the quick entry and exit times on deals.

IMO the best investor contracts are short and simple enough so as to not be intimidating to sellers, but comprehensive enough to include all the necessary buyer protections and local requirements.

Just gotta be real with them :D Let them know you will try your best to have seller cover all of some of the closing costs.Can also always offer above asking price and ask for the difference as seller credits

Risks are high and rewards are ok at best in FL at this time.