@Nia Booker, even though you explained things to the best of your ability I still don't think you quite know what's going on with your situation.

For residents we meet through FF.com or ones from an STR site that want to extend, we offer the ability to do so using leases created by avail.co . 

NEW TENANT GIFTSHere's what we give new tenants.....Cleaning Bucket with Cleaning Supplies:white vinegar, baking soda, awesome degreaser, disinfectant wipes, carpet spot cleaner, magic eraser, all purpose cleaner, scrub sponge.Tote Bag with Useful Items and Tools:hand soap, paper towels, plastic garbage bags, toilet paper, toilet plunger, Zip-It (strip for clearing hair clogs from drains), plastic clothes hangers (6), shower curtain liner (good quality cloth one), laundry detergent, dish soap/dish detergent, cutting board, "Freeze the Grease, Save the Drain" kit, “Recycle” bag for collecting materials for recyling, magnet with our name and contact information, picture hangers.Refreshments In the Fridge (for move-in day): several bottles of water, healthy snacks, bottle of sparking cider with a welcome note attached.Larger items: Welcome mat, shoe tray.

You have no ability to make improvements to increase the value (and benefit as the owner); you can't deduct mortgage interest on your taxes as you don't hold the mortgage; and you can't own it while the value rises over time.

I have done this a few times myself and have a few basic recommendations:1) Make sure the seller owns the property free and clear and that it's very clear to both parties whether the arrangement involves a deed of trust or contract for deed2) If a balloon payment is involved, be sure to assess your ability to refinance and make that balloon payment in the future- optional extensions can help manage this risk3) Understand the tax implications if the interest rate is notably above or below market rates4) Get title insurance! 

I can risk assess every individual based on their background, It is screening 101.Thankfully other peoples moral outrage does not interfere with my ability to successfully operate a minimum risk business within the boundaries of the law.Bottom line is laws are never ridged. 

Using co-hosts might help distribute management tasks, but this can complicate your ability to meet the material participation requirements, especially the 100-hour rule.

Philly always had the ability to become a great city; but the people who are elected just hurt the hand that feeds it. 

Receiving rent while starting the rehab doesn't affect the ability to deduct these expenses, but you cannot deduct them all at once.

DSCR has also taken a good hair cut on rates today and on lower LTV's they are even better.