Stay away from credit card debt or vehicle purchases. 

If they had been, it would be as you stated......but since they were Not served, at the least you would have to give them proper notice after the sale to start the 120 day clock. 

(I'm not an attorney, consult yours)The first would be the promissory note, that outlines the terms of the loan, and the second would be a properly recorded mortgage, which defines what collateral can be claimed in the event of default, and the related process for making that claim.As @Robert Kinsey mentioned, 5% would be a bit low for me as a lender, but I'd be very happy to pay it as a borrower.

Is the property properly tax assessed?

Also, when it does rain hard there is some water that leaks into the basement, but in both units there is a properly working floor drain and nothing is down there to get damaged. 

Plus, it helps you to know if the PM isn’t handling things properly to begin with.

Eventually everyone shows their cards. 

. -- I believe I would only be making payments if I had pulled money out from the line (its an LOC, not a loan)  Otherwise it's just considered a big credit card, with no debt on it.

Plus, it's not like the rental demand in this area is going to go down anytime soon, so the cashflow will keep rolling in as long as it's managed properly! 

That's the only person who can advise properly on how you should do it, other than maybe an entity specialist or something.