A family friend is financing a twin home building project and will receive a percent of the profits when the homes sell.

You can walk away after all selling fees with a nice profit, but I would not sell it right now.

Or they should simply tell us how long they're able to commit to and we'll run this as a short term lease until they have more clarity on their situation or move out, but it doesn't appear the tenant wants to pay a dollar more.So, basically the question is - do we take a leap of faith and lose our peace of mind or insist on sticking to the contract and risk losing the tenant?

I sold a duplex to a lower bidder simply because they didn't have an inspection clause.

Ideally I would like to use the profit to pay off some of my principal on current primary residence mortgage and use the rest for investing in a townhome that I can rent out...Thank you for your inputs!

Buuut, there has to be a set of criteria that make this setup a reasonable/profitable situation.

I am already way over budget and the bid number could eat all if not most of my profit at this point. 

If on the other hand you are simply making excuses for them and do not want to hold them responsible that is a entirely different problem.

Many landlords think putting up with bad tenants is preferred to the inconvenience and cost of a turn over but this is usually a issue of a landlord simply not taking care of business and using the cost of turn over as a weak  excuse to avoid work. 

I will promise the owners $1000 a month for 5 years and have permission to sub-lease and am keeping whatever profit I can make (say if rented for $1500).