When we offered to buy all units, the seller happily considered financing because he had hoped originally hoped to keep two for 5 years so he could make some money over 5 years.

Hi,  I own two units that are 30 day minimum.   

These tenants rented a two bedroom and one bathroom and as a bonus I gave them also this small garage storage (too small to fit a car). 

They called 3-4 times the past two months to ask if I was renewing, I said no.

There are two different topics / questions1) Can I deduct real estate education if I am involved in a real estate rental trade or business.2) If you can deduct it, is there a passive limitation involved.

That is primarily because the cost of money (interest rate) is twice what it was two years ago.I suggest that you adjust your thinking about buying a vacation rental just a bit.

@Jack LittleThere are standard templates from Fannie Mae but I would have an attorney draft these documentsThey can be held (the lender) through a deferred retirement account but make sure you are using a third party servicer to collect payments

@Heather Gates, I appreciate @Bill Brandt's shout out.  1031 exchanges are like going two miles deep in a two foot wide creek! 

The problem you are concerned about is how the two policies would interact in a claim. 

two different perspectives but for now I will tell you about the buying side:   1)  You don't vet the seller and property out fully and there are issues - title, financial, etc....