If an owner carries that has a mortgage, it's called a wrap or wrap-around mortgage. 

If I were in your shoes, I'd simply explain to the downstairs tenants that when the noise is going on, they should call the police and not you.

If you can increase the income through a legally zoned apartment you will increase the value of the building not just your cash flow so its at least worth pursuing. 1) Call your local zoning board.

So say you are calling a list of leads you have received (I'm going to begin calling next week so I'm open to any advice); but say I called down a list....As I go, depending on responses I receive, what do I do with the leafs?

You should of called me on this.

Could we have a quick call to discuss further?

Simply call and inquire whether the deed has been recorded.

I called elsewhere to get a second opinion and that lender said YES!

I went with the "free" group and did a great deal of work knocking on doors, hanging sticky notes, making phone calls and would find people they had no clue how to reach and I'd get them on the phone etc.

Call a pro pest company, not BillyBob in a pickup, and have them locate the dead animal and remove it.