I haven't seen anywhere that an FHA-approved loan Applicant has to be a "new home owner" (ie. first home), which I think is what concerns Ed.

I've also found that when I run a credit check many who have a fair number of accounts over 30 days in arrears (even if they haven't reached the collection stage) are to be avoided over a concern they've become too casual about living like this and thus adding another notice of a late fee (or even a threat of an eviction) doesn't seem to bother them very much.Gail

My concern is I am wanting to buy and hold long term and am worried about rate hikes impacting future cash flow.

He actually said this house was split into two units...a two bedroom and a one bedroom...then I can look up taxes...my biggest concern was rehabbing.

Also, for small investors with limited capital you should be vary concerned with taking on too much debt as you can drown in it.  

The contract he wants me to sign describes the second house as an assessory dwelling unit and I am concerned that I won't be able to sell one of the houses when he is done.

You claim to be a real estate professional in your title and you can't understand the value you bring... that's concerning.

My main concern is that there are too many unknown variables for someone like me with very limited experience.  

The only thing I'm concerned with is that the property may not be worth 82k if you weren't looking at numbers - probably more around 65 - 76k (I'm still learning the market and RE in general, this is my first deal, so, it's hard to tell).The property sold for ~115k during the 2006 high, and ~56k around '10.

If you are concerned about your landscaping you need to hire a lawn service and build that into the rent when it is leased.