Yes you are putting up your 'credit score' as risk I suppose but he is putting up cold hard cash on the deal. 

You will have less cash flow and appreciation, but your risk is very low since the complex is responsible for many major items that can jettison a new investor from positive cash flow into negative.

Investing in anything comes with a set amount of risk. I

For example, it would be very risky for a new operator to start building their first luxury apartment community right now.

I am concerned that an exchange might limit my reinvestment options (making my first BRRRR investment more risky than this noobrrrr feels comfy with).  

Inherited tenants are risky to begin with so don't play nice with this person; especially given the pandemic and lack of evictions going on right now. 

Where they are potentialy more risky (Does not mean they aren't safe) is that YOU need to be aware of liens, and lien priority.

I would not want to gift the money because that is risky for them.

That seems so far into the risky spectrum that foreclosures would always have to have huge margins to account for that level of risk.

The seller is not willing to amend the lease or do cash for keys.Otherwise the property is in a great location and cash flows well, the biggest risk is carrying on these tenants for about a year.