If there is a mortgage attached to the property there's a 99.99999% chance there's a clause in the mortgage that requires it be paid off when you sell - regardless if it's in your personal name or an LC.Yes, it does complicate things when doing 1031 - but not really... there are rules you have to follow to stay in compliance with 1031. 

We will stay in the middle for the entire term, pay the rent every month (even if the house is vacant), and be responsible for ALL maintenance and repairs under $500.

I would stay close to the development and near the light rail. 

When someone posts it stays on here so one time I was in an eviction forum responding about the process and another about Veteran rentals.I have probably gotten hundreds of calls over the years for that and I had to explain I am not focused on that.So really I mainly post about commercial real estate as that is my daily life.

I would be really surprised if you could simply assume a commercial mortgage. 

The ROI would be such that we would make money on the rehab as long as it stays within budget.

If they wont be breaking any laws or HOA issues or damaging the property by parking there, I would get an "in writing" time they will be there, and go from there.....At least they asked before hand....many tenants would just do it and then ask for forgiveness if they get caughtNext question...how often is this "friend" staying there?

It allows for overnight guests but extended stays must be approved by landlord.

The closing cost was based on a refi cost I got but you’re right it is probably too low.I didn’t calculate the ARV yet...I decided to stay conservative and keep to the same as the purchase price.

He is pretty conservative and has encouraged me to stay away from some of the properties I've been interested in for various reasons.