Follow-up with an attorney if you are concerned about liability.I don't have any direct advice for you without knowing your situation and more details. 

Your cash on cash could be extremely high because your paying such a low down payment.

And is concern that you invest in “low”end homes or “war zones”??

Luckily it was caught, added onto the HUD-1 and I was left with no obligation to it.I've done several Multi family transactions prior to this without the aid of an attorney and was never made aware of this concern. 

try to  get an idea  what lender (s)  has  made loans in the complex in the past few years and then contact them ...you might also  check with the smaller  to mid size banks and credit unions in  the  condos  area  as they may not be as concerned with this issue

They have provided me with current pay stubs, but after calculating their income, my concern is that their total monthly income falls below the rent threshold.

Single-family housing is an extremely solid choice if you purchase well.

Yes, there are issues of concern with fractional reserve, but that doesn't mean there *aren't* concerns with central standard.

Yes, I am focused on doing flips in SoCal, especially in the IE but given that it is extremely hard to find and acquire good deals these days, I'm thinking about expanding into the LV area as well.

Anyone concerned about the baby boomers?