@Adam Keffer   If he's okay with it, the best thing for you then would be to have your attorney just draw up new docs and record a deed of trust or mortgage (whichever is used in your state) against the property securing the loan from the beginning so that it actually is a secured loan in 1st position. 

We're adding value by rehabbing the properties and putting in nice finishes, which will draw higher rents.What was the outcome?

If there are several complaints to the police, this will draw attention also.

That's likely to draw a lot of single, younger, lower socio-economic class men, who I expect would be more transient and could possibly bring more headaches.

I realize I am likely going to draw some frowns and eye-rolls for my answer, but I need to be authentic as to who I am and what advice I can offer. 

In my opinion I feel a sublet works best in this case, but he would prefer that we draw up a new lease.

It'll allow you to draw funds to cover the repairs as well as provide you money as needed.

They must pay off your note at FULL value by 'X' date  (implied OR ELSE).Draw them a timeline. 

The purpose of the draw would be to invest it in a multi family property deal.

You need to have enough exposure to draw in enough applicants that you can then choose a good tenant.