It's an REO being auctioned May 16-18th.  215 pads, 59% occupancy.  

I agree with almost everything @Bill Jones said, however here are some caveats:1. the transaction between your seller and your LLC is exempt from the dodd-frank laws due to it being a "commercial loan", but ANY way you extend that credit to an owner occupant means that you are extending credit to an owner occupant, even if you're just assigning interests.

At the moment class C occupancy is between 94 and 98% depending on where you are located within the state.  

Check your lease it might have a showing clause ,but the good news if you cooperate and  a new tenant is approved to move in before the end of your lease you would not be liable for the full amount Landlords can not charge twice for the same occupancy 

It is hard to comment without knowing the exact address.I like 72116 best but parts of the other zip codes are also good It depend on the location and occupancy + turn over in that area.You need a good property manager to work with that could give you feedback on specific location you are considering. 

If it says Exclusive then it's for owner occupants, not investors.

Can't compete with those who can offer cash, so looking for an FHA qualified loan as I will be an owner occupant.

You'd look at historic patterns and owner/occupant profiles, we don't have enough data points to figure the probability but 1.2% of profit is an acceptable known risk by most standards. 

Purchase price: $233,000 Cash invested: $50,000 Legally 2-family, functionally 4-family, turn-key property furnished and converted into 4 Airbnb listings with 95% occupancy month over month.

If he is planning on occuping the property, then it's almost impossible to fail seeing that he will have to pay to have a roof over his head regardless.