I agree they will fight this, but if the courts rule it unconstitutional what can they do? 

On a 1M deal, it's important and are you aware of the equity rules for the determination of a sale?

As a general rule of thumb if the collection is more than three years old, it will actually hurt you to pay it. but sometimes it is needed to avoid a judgment (which will really hurt your scores).

I always try to go by the golden rule, it has worked well for me :)

I think that the improvements would bring the gross rent to over the 110000 at full occupancy and then this would fulfill the 2% rule.

Need attorney specialized on SEC rules applied to real estate private lending and  commercial broker mortgage. 

Are there rules surrounding the down payment.

If the down payment is lower, you can end up with a bigger monthly mortgage amount and that may make it impossible to meet the 50% rule.If you aren't familiar with he 50% rule, here is a post on that.https://www.biggerpockets.com/forums/88/topics/133...good luck!

As a general rule, any income earned from sources within a non-residence state is taxable income in that state, as well as in your state of residence.  

I have lived but this rule - Trust but verify everything!