Or Handel this type of situation?

The second issue is situational while the first issue is unavoidable.

Since last August when I took possession of the 20 unit, I began raising rents 2-3 units at a time, and now everyone is at the higher rents (average $140 per unit).In your situation it sounds like the rents haven't been raised for a while, coupled with your improvements the tenants expect there to be an increase.

If it’s not, they spend their first or last day stressed.  

Do you think that paying 30-50% of your salary on rent is a stable situation?

Hey @Travis Howser,I'm in a similar situation, US citizen living and working in Europe.  

First, you need to thoroughly document everything, starting with when and how you became aware of a problem.Second, you need to verify the situation.

Good lesson I'll have to keep that in mind when if I ever have the situation come up!

If anything happens to the property, it is the lien holders loss...title transferred, but there is still a lien...this is a very problematic situation.

Traditionally banks loan on appraised or purchase, whichever is lower...you may be describing a hard money lender...that's a different ballgame altogether...It's impossible (in 99.999%) of all real estate acquisitions to use financing and acquire a property with no money out of pocket...best you could do is HML if you're flipping this...you may scrape by with points and fees...If you're using HML you will have to sell the property or settle the debt with a re-finance...re-fi's are typically 70% LTV...and completely dependent upon your personal financial situation, DTI...easy to get burned if you don't have capacity or the value is not there...and this is an expensive asset.A conventional lender can't lend if seller financing is involved...lending constraints...