A single-member LLC provides protection while allowing you to report business income on your personal taxes.

Through conventional loan with a local lender at 5% downpayment, financed with LLC income.

Please check out the book I co-authored called Lend to Live: Earn Hassle-Free Passive Income in Real Estate with Private Money Lending published by BiggerPockets.com/lendtolive.

Combine that with SS income (maybe?)

“Ideally we would like to sign a longer term lease and it would be incredible if we could do it at a reduced rate” please keep in mind this tenant have asked multiple times in the past that want to purchase this property and we have said ‘no’. 

These are generally 12-24 month interest only loans that borrowers will generally pay back by selling or flipping to long term financing like DSCR loans.More on DSCR loans:DSCR loans won't use your income to underwrite the loan.DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.Here's a bit more in detail about how rates are calculated for DSCR loans:1.

I certainly don't know for sure, but it's possible the H&W either took title as tenants in common or they got divorced which reduced their entireties interest to tenants in common. 

At the end of the day you are not going to get enough income to justify all the headache and extra funds you must layout. 10kish, furniture 24-hour security system, yard maintenance etc.  

Also if he just postpones again, Can I keep or reduce the deposit money for rental loss? 

Do you have discretionary income that you could use to save/invest/buy more properties?