Or just clean up the loans to get them into a single loan?

The wholetail is a smart play, but you should be cleaning the place thoroughly and doing no repairs and then presenting an honest proforma with rents and expenses estimated so investors have a PDF to look through.

We are concerned that the smoking/smell will turn off prospects as well as the extra cost of cleaning up areas after smokers move out.The building is in Illinois. 

Given, I'm a nice person and a clean roommate (LOL) but they don't know that.

I can see a full day of labor, between getting supplies gathered, setting the job up and also clean up and disposal.

We both have high W-2 income and own all our properties clean and clear.   

Another one I talked to requires owners to pay for housekeeping at the end of their stay and a third said you could save money by coming after a guest checks out and cleaning after them yourself. 

You will clean it out, but for that, you need to get it at a lesser price, bargain basement because this place is dangerous.

renovations, cleaning up the property What was the outcome?

In our case they'll have it cleaned up within the next year or two, so the timing worked out well.REPS status alone is not substantial a risk of being audited.