Seller can terminate the month to month agreement with proper notice and deliver the property to you at closing with one unit vacant or no deal.Obviously this seller isn't serious about selling.

Talk with your lawyer to set it up properly.

I quickly learned it's a process and with the proper focus and commitment you can accelerate the learning curve but still have much more room to grow. 

If he has a rental agreement now with his brother, you'd have to honor that till the end of the lease term,, otherwise, if you permitted him to stay it would automatically be a month to month and you'd be required to give proper notice..

Further, it seems the limited servicing platforms don't have much experience in the staff to properly guide the investor and push the loan's disposition.  

I am eager to get started but do not want to rush into it without the proper foundation.

The "bad" is usually overblown...but you do need to do your proper due diligence into the condos financials and such though.

I recommend you tell your tenant the same thing, get proper insurance.

Even if you're sure you can subdivide the lot, building the new house with out the proper permit and inspection you run a high and expensive risk of having to go back and fix something if it doesn't pass inspection.

The proper tax treatment is to add your net rental income to your other ordinary income, then compute your taxes.