If anyone is still searching we'd be happy to discuss your situation with you and see if we can help!

While no money is exchanged hands the bottom line in the scenario you have laid out you are giving the homeowner a loan that is paid from the sale of the home. 

What did you pay, what is market rate rent, how much equity do you have, and what interest rate/loan type do you have?

Weird, I've never heard of a loan fee being charged (besides appraisal) if the loan doesn't close.

Rents are severely undervalued and several potential units are left vacant due to current owners situation.

I have been doing plenty of research in short-term and mid-term rentals, but I am a little nervous with what I am seeing with a friend's situation.  

And a high speed clear the house out situation.)

More on DSCR loans- DSCR loans won't use your income to underwrite the loan.

I'd tell them the lease states they pay utilities and if they aren't happy with the situation, then they are welcome to give notice now and move out at the end of Feb with no penalty.going forward, include how the utilities are divided in the lease (eg 4 people living there, each pays 1/4 of the utilities).

The lender will give you a generic preapproval letter that states how much they are willing to loan you when you do decide on a property.