My concern is if you don't know the lease goes with the property, what other important legal details are you missing.

If he only charged you $1000 for the exterior pain and trim, that seem extremely low unless its a tiny townhome.

There isn't anything structurally wrong with them where I'm concerned about the foundation.

I’ve heard the down payment for an owner occupant can be extremely low, but would I need a parent to be a co-signer?

My experience so far though has been extremely competitive trying to get those properties though, so don't expect to just jump on the MLS and find an easy deal paying way less than market value.

Yes, but we are concerned about ESA dogs, and if a homeowner of a single family house who rented without help of a realtor can refuse ESA dogs. 

Property in San Francisco area, tenant late for pymt for the first time, extremely demanding & difficult to deal with (that shouldn't warrant an eviction though). 5 day grace period has passed, we are 3 days past due date and he is not being very communicative.

However what the bank would be concerned with is your cash flow and debt to income ratios.

@Buyan ThyagarajanI would be more concerned with the size of the renter population for 2-bedroom homes versus 3-bed properties.  

Has anyone done this and what should I be concerned about with this?