As a rule of thumb, the bigger the renovation, the bigger the risk, and a full gut sounds like a big renovation.

Why would anyone want to loan money for a business you're new, when they can give that same money to a builder who specializes in this thing. sure the numbers may work, but it's a lot of risk to a bank to take on construction loans. so its' not so much that this isn't a deal worth doing for you, it's just not a deal worth doing for a lot of banks. a 4plex is not a great asset for many banks either.

The high end flips look fun, but the risk is tough.

For less hassle and virtually no risk, they can throw their money in any random mutual fund and grab 10-12%.   

Amending will also increase your audit risk. 

I appreciate your vision and  risk considering the picture 

If something significant turns up that would be a deal breaker for you and the risk couldn't be mitigated by a higher security deposit, then move on to #2. #2 seems to be a higher risk due to lack of rental history, less stable work, and less income.

Hopefully you require your tenants to carry insurance too....rental insurance.

@Joe Tomko what’s the risk involved with the delinquent mortgage notes?

However, in the context of an acquisition cost or contract price as it pertains to lending risk, what is ARV?