Modern, direct vented, natural gas and propane furnaces are typically in the range of 92 - 95% efficient.Your decision on whether to replace the furnace will depend on the efficiency of the current unit and whether it make more business sense to replace the furnace or to add a heat-pump with an exchanger insert to the existing system ... and, it is (or should be) primarily a mathematical decision yielding which ever approach is going to offer the shorter payback and lower operating costs.The math aside, there will be other non-math factors.  

You as a flipper put out a good product and you’ll still get top dollar.As Jay has stated the new strategy seems to be shifting from list price is set below market to generate foot traffic for multiple bids and revert back to pricing it to market or slightly above for concessions as it’s slowly shifting to buyers market.But I agree, don’t expect insane triple digit net margins anymore.

@Wayne Brooks, the second lien was owned by Beneficial Financial, who closed down all their operations in 2016.

Those are the people that I think will either validate or make you re-evaluate your calculations.Try not to make pleasing the seller an issue with financing, If you go trying to support a 10 year mortgage when you don't have the financial cushion set aside or cash flow generated for repairs, CAPX, evictions etc. 

This is not the wild west, you are operating a business in which laws govern your operations.

I can't imagine the investor would want to put any restrictions on rentals as they will want to rent out their units to generate income.

(I say none, but problems impact returns, you just won't get a call from a tenant at 2am)Downfalls: You have to trust the operator, the market, and understand the investment at hand. 

I think personally it makes sense if you're staying at a good rent level and can buy a multifamily house to generate cash flow.

If it’s a bad operator or the property has physical deficiencies that’s one thing.

I used this property(my first rental) as a cash generator/stabilizer for my additional rental properties.