You'll simply move on and spend your time doing something else you actually love or NEED.Good luck to you!

He may be currently short of funds to loan, or he may simply not like the deal.Hard Money is a tool.

I simply hand them the checks, laundry money, fees, and expenses for my time and materials. 

If at the 11th hour of my decision making on the first deal I had not listened to my gut or simply gave myself an excuse not to bother him I would have paid dearly.The best contacts will come from the most unsuspecting conversations so make sure you tell everyone what you are doing and talk to people everyday.

Then you should compare all the time, work and expense involved with simply purchasing a separate rental unit located at a different location.

Simply put, to get a cash flowing rental we need CASH. 

Mold, broken pipes, holes in walls, etc are not safety issues. 3.

yes, HUD is notoriusly slow, just like anything else with the government, and they do prefer owner/ occupant sales over investors. there are many other creative ways to find and buy real estate. i use HUD for one resource only...... to find other houses. vacant houses are like deer at night, where there is one, there is another. i look up a HUD house, go to see it and then take a tour of the neighborhood. i would almost guarantee you that there will be another vacant house in that same neighborhood. i have personally bought a couple of houses simply by going to look at a HUD house

Now, I could have decided to buy the property with the SFR and the back unit as a rec room and simply rent it out to one large multi-generational family - and that would have been certainly legal.  

Do you address to the family of or simply to the occupant?