I noticed the seller provided documentation that none of the units put down a security deposit so that raised some red flags.

That said, I believe that the profitability of short term rentals will continue to decrease until maybe only the industry heavy weights or the owner occupants can stay afloat. 

I’ve already sent the 5 day pay or quit notices for both units.

I notice in IRS Publication 537 that real estate dealers are forbidden from using the installment method and must realize all the gain in the year of the installment sale however it references some special rules in 26 U.S.

I am also relatively new (but older) though I have purchased 1 property last year and looking to purchase another or two 2019.My question though is I notice you and others tend to suggest FHA loan for starting out, as opposed to a conventional 3% down loan with PMI that can be removed at a later date.Is this specific to duplex/triplex/fourplex?

State laws vary on how much notice you must give month-to-month tenants.

My land contract has a provision that says if they miss 2 payments the contract is void and any money received is treated as rent.You have to send them a 30 day notice I believe stating that you are cancelling the contract due to breach of contract.

Although there was no elevated humidity or surface areas affected with mold, several of the air samples came back with very elevated levels.Almost immediately upon receiving this notice we offered to let them break their lease without penalty.

Notice the cars that are parked and if people that are walking around seem friendly or if young families are there or not. 

I would let them start, if you are taking it next week then it is probably just the notices, so ask for copies of the notices that they sent to the tenant as a condition of closing.