My wife and I currently have an investment property in the Elk Grove area with 140k in equity and a home in North Oak Park with 90k ish in equity that we're currently airbnb'ing but would prefer to not have to go through the hassle of refi or pulling cash out with a traditional bank/credit union.Both have credit scores in the high 700's, low 800's and debt to income ratio of about 25% with a potential of being closer to 10%-15% if my wife finds out she passed the CA Bar this upcoming Friday!

Also your insurance and electricity budgets seems on the low end but I may be biased to that because I live in a place where insurance rates are insane.

Small town Nebraksa generally has low priced real estate.

Please don't confuse with "low income" or "subsidized" housing however.

For example, if I sold 1/2 the balance of the note, the yield DOUBLES to ~20% on a 10% face rate note for the note buyer (unless of course I'm the note buyer, then it's okay :-)Pardon my french, but I will be a son of a b*tch before I pay a totally passive note investor that rate of return in this low interest rate enviroment. 

Will this still be a good deal with the low school rating?

Here is a list of lenders offering such loans:https://www.biggerpockets.com/blogs/2810/50272-lis...I'm really big fan of using retirement funds for private lending,  you can get decent return (10%+), risk is low and it is truly passive.

The appraiser found the 3rd unit was not permitted to have a kitchen or heat, it was only permitted to be storage.

It is not my responsibility to minImize my profit, supplement someone’s rent, or in any other way be responsible to provide low income housing.   

it sort of depends if your property is an A or C property  on an A you should almost always go with new stainless steel In a dilapidated apartment with low rents I might throw in a used $50 appliance and if it breaks just replace with another as repairing usually costs more tha fixing  Nowadays you can get a new stainless stove for $400-500 so you might as well.