I'm just at a loss as to how to proceed after we make a deal as far as the combination of bank financing and seller financing.

Convenience comes at a price, and this price is loss of freedoms - we are seeing this play out everywhere.

I'm going to have time to get a game plan while I recover from surgery.

I purchased it from a couple that were burnt out on landlording and sold at a loss to get out of it.

Those K-1's have profit or loss that goes onto the partners personal returns.

My logic runs something along the lines that if they couldn't afford to maintain their mortgage the first time around, I usually hold no hope that they'll be able to maintain rent or a mortgage on the same property the second time.They have certainly exhausted all their cash reserves and are running hand-to-mouth (paycheck-to-paycheck) so until they completely recover, any little thing can throw them back into financial hardship - that's just a risk I wouldn't want looming over my bank account.Having said that, bad things do happen to good people and while their current intentions may be beyond reproach, unless they can clear up their mess on their own, they'll likely be moving out sooner or later - that's where you can step back in and truly help them out.

If insurance is required the security agreement will recite the matter and if in the body of any note, the insurance assigned should be at the option of the lender for the application of loss proceeds.

An inexperienced buyer's loss rate will be higher.

Is it at a potential loss?

And I am more cautious about buy and hold for a SFH since one vacant unit = 100% rent loss... but it sounds like you're doing well with yours, which is great!