Anybody can call themselves a General Contractor with no testing.Some municipalities have specific licenses which require little to no testing.

This is correct, a lot of the FHA guidelines have changed in the last year making ADU financing a lot more acceptable and easier.

Nothing crazy, but a good starting point for me to test things out and see how it goes 

Material participation requires meeting certain tests, such as spending 100 hours or more on the activity and participating more than anyone else.

@Max Bellino You seem eager to learn and I hope you accept this as constructive criticism.

If he expects you to accept rent payments 3 weeks late every month--will you just do that with no repercussion because he "expects" you to (???)

The restaurant I initially went to was accepting no walk ups.  

For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

An offer of $34.95M negotiated up to $35M would actually put the seller down -$95k net versus accepting the initial offer. 

1099 C is an interesting question ask your accountant.. note holder asking to be paid off . this is just a negotiation.. you offer what you want to offer and they can accept or deny.