You just need a purchase agreement between the two of you with clear terms that either an attorney can draft or you may be able to find an off the shelf generic one (I never recommend these as they are too generic and don't protect either party), or you can ask a broker to prepare one for a flat fee.  

While I agree that many blue states are overly tenant friendly, I'd nuance this with two caveats:1.

Seems like I saw some articles about this a year or two ago. 

I would rather sleep without worry.No there is no two week rule.

Two rooms are on airBNB. has a solid rent history.

The only two things I see you could do would be either to owner-occupy or to shop around to other lenders who need your business.

Their lease agreement expires in 11 months.what is the best approach to motivate the tenants to address these two issues and be as civil as possible about the situation?

I've had my own company for the last two years which makes it a little harder to get financing. 

Our Initial plan was to renovate the lower unit, while we have the tenant upstairs and then renovate the top and live and occupy for a year-or two and then rent the top out and buy our next property.

It wiped out two years of retirement income from the property.