Nicholas, as long as you live in one of the units for at least one year, then you should qualify for an FHA loan.

It sounds like a long time, but RE is a long term game.

People will always have issue with shared amenities in a short term rental house.

I am looking to expand my portfolio whether in long-term rentals, STRs, flips, etc with a partner in order to better utilize funding, etc.

@Brendan M Hornung what's the long term goal of this person?

While seller financing is less common with flips, there is no real reason it can't be used, as long as it satisfy your needs and the sellers.  

Also how did your tax return differ in terms of what you paid or got back from the IRS?

Considering their LTV is at market or debatably below market (depending on the asset), if the interest rate or loan terms aren't advantageous, I'd also suggest getting quotes from other lenders.Since you are located in upstate NY, I'd look for local banks.

Being that I am do not in incorporated Palm Springs, I do not fall under the city's short term rental regulations.

However the previous owner will be in the military for a long time, he's on the note, and so the bank can't foreclose.