but 3 people & 1 bathroom seems inadequate. 

call hud and make sure that make up an agreement about if any thing does happen hes on that fine line about having to leave or all

I feel their response was inadequate at best.

First of all, you should be getting an estoppel certificate, signed by seller and tenant, that outlines current rent, current deposit (even if its $0), and any current outstanding oral agreements.

Oh, and say no to paying all up front - could establish a longer-term contract, or all cash - you only want people renting from you who are the type to have a bank account.Anyway, if I scared you...well, maybe that's good haha. 

Once again, I know no one making money in Sec 8 who isn't handling much or all of their own maintenance, cleaning, renovations, and turns between tenants.If you're willing to take over this management, then I have to ask you, how many trapped but thrashing rats have you beaten to death with a 2x4, how many alarm calls have you responded to with a gun?

Lots of great advice here except I would communicate (when you feel appropriate - me it would be a bit later than sooner when you have been their landlord for a bit longer) that market rent is X but I am raising rent to x due to great reference or whatnot.Seems your prepared to have vacant units - if the case I would probably move them close to or all the way to market.

The tree needed to be cut down or all the flowers removed she told me. 

Well, the tenant broke the railing but it sounds like it was inadequate.

and the remain tomorrow or all together tomorrow?