Since you plan to wholesale instead of building yourself I would suggest doing a little code/zoning research and see what your limits are.

Also using any kind of corporate entity (regardless of it's a corporation or an LLC) can limit your loan options. 

If the rent controlled lease was signed with a parking spot, or any other items, it's probably under the rent control law limiting price increases and such.

There are some limitations, but the Phoenix area will be more liberal on it than most other areas because it's so key to the Arizona lifestyle and economy.

No one from FHA will come and knock on your door to verify you're there a certain amount of time so just be honest with the application and it things should be fine.

A fast turnaround like that limits your options a bit but he can definitely do it. 

I notice that city's regulations often limit how much a developer can build on his property.

I am purchasing the homes at fair market value and close next month.The engineering and city applications are already submitted for the subdivision and signs indicate it will be approved or else no deal.I have the homes under contract and the property owners have signed another listing agreement to allow me to market their homes to the next buyer.

with 20% down and 5% interest, your only looking at monthly mortgage about $1000 (and if someone can pay $2000 in rent a month, they can come up with $40K of down payment easily). so your target for tenant is very limited to someone who has good income, but going to stay in the area for only few years and move out.In the end, it comes down to what level of risk are you willing to take?

I agree with @Omar Khan.I don't think a high income earner with limited free time should be messing with single families, and probably should skip even small multi-families.