This is going to be the easiest way for him to be out from under the treachers of landlording, and this would be the easiest way for you to essentially assume his loan, and have control of the house. 

It's hard to give up control to management after working so hard!

gluing hardwoods down is the best option and controls noise, movement, water penetration far better then nail and floating options. the trade off is it takes 3x longer to install. so it really just matters what you goal is and what your willing to do or spend to get there.

This gives them full control of the loan parameters.

My issue with the latter is that the heat is controlled by the upstairs unit, so that doesn't seem fair to the lower tenant. 

I was actually queried by the IRS and because I am very careful about not touching those funds directly (I don't have SDIRA LLC or checkbook control like some SDIRA companies are pushing), I cleared their query easily.

I don't plan on selling any but even if I sold 1-2 I would still control the HOA.   

The seller would likely  have to foreclose to get control of the property back if the buyer did not perform and that money would be out of pocket and not in the 10% down.Another option is the buyer puts down 15%, the bank loans 75%, and the seller takes back a 10% second.

BUT if you live somewhere w/out rent control you could do this QUITE easily, but those are the numbers I use to see if properties 'work'.

There are new pre-fab firms doing exciting stuff with innovative designs:http://methodhomes.net/http://www.projectfrog.com/There seem to be a lot of benefits such as building in a controlled environment, cutting down construction time (which mean getting to market faster, lower construction loan interest, etc.), faster permitting.