I am a practicing real estate broker in Oregon and have “intended” to invest in residential rentals since I got my license 12 years ago, but timing/circumstance hasn’t allowed.

It is possible this is a "red flag" about the seller's business practices but maybe not.

I suggest you speak to your CPA or hire one to make your employ good business practices at the beginning of your real estate career. 

Late payments, high credit utilization, derogatory public records, collections?  

Its super funny, those who think rent control is a good thing, and want to limit the amount of monies that property owners collect. 

There's more to the L/O than just this, but to answer ONLY this question, you will lease the property from the seller for less than the current rents...which you will collect now. 

I think Brian's advice is great depending on the numbers in your market, it's practical.

I was looking to see if I had practiced conservative judgements when filling in tool.

I believe in this scenario you would be the one who collects the tax breaks, since you're the one who owns the property.There is a third option, and you should make sure you don't fall into this one.

But if you can make it work, it could be good practice and less risk if something goes wrong.