The seller was one of those heirs, but there were some in previous generations who died intestate and others with wills that had to be probated. 

I’m in a 506(b) on the GP Side right now & other than the ability to advertise under 506(c), one reason one wouldn't go with 506(b) and accept Sophisticated investors is increased liability.We feel comfortable and run a tight ship so we’re not too concerned; However, our SEC attorney has drafted all docs (operating agreement, subscription, & PPM) and has encouraged us to have the PPM be a more robust version because we are allowing sophisticated investors to colloberate. 

The thought of a house sounds great and it would be so cool to own our own place, but the MFR offers another platform to generate income.

What's the better lead generation?

I'm not sure exactly what your operating expenses are BTW, but let's assume it's 45% of monthly rents including insurance, taxes, utilities, vacancy and maintenance reserves, and property management- 1350/mo.

Am I correct that Capex is not counted in the operating expenditure, and as such is not reflected in the NOI? 

A "flip" can be pretty damn far in the red but still be "viable" if it makes good TV that generates a bunch of add revenue. 

Regardless, even when I included insurance, the total expenses were about 33%, but I usually make my operating expenses at the industry average of 45% and that assures me I've got things covered. 

The boiler took a longer than expected period to reach a full operating temperature of 180°F.

Generate multiple streams of income.