They could not weather the storm, that's why leverage needs to be utilized appropriately. 

At that time, the builder will pay the accumulated interest along with the principal.We have discussed a few different options to structure this arrangement, assuming an interest rate for interest-only loans with monthly payments is 10%:Option 1: delayed interest with a rate of 12% (interest rate is 2% higher)Option 2: charge a lower interest of 8% then profit share (need to determine appropriate % split)Any other thoughts on how to structure this arrangement?

You failed to handle the deposit appropriately, so they have good grounds for that.

I think if I'm able to find something appropriate in the next 2-4 weeks, I will buy one.

I was trying to find the appropriate forms needed.

A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.7.

You need to know what a good PM looks like, then screen several until you find one that provides the appropriate value for what they charge.Remember: cheaper doesn't mean you'll make more money.Start by going to www.narpm.org to search their directory of managers.

I also told the tenant she would need a new business license and insurance appropriate for the new business model.

Typically, I've used the 70% MAO rule, but given the current market conditions, I'm wondering if adjusting this rule to 80% is more appropriate? 

I suggest that you start a new post in the most appropriate forum so that you get the greatest visibility and most beneficial feedback, your question may get lost here.