You need to have the income and tax liability to support the depreciation.

(gross rents $4900; 8% PM; mortgage+insur+taxes = $3600/mo).

Mgt, Landscape/Snow, tax, insurance, utility then debt service. 

This is tax free. 

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

Attractive Tax Environment for InvestorsGermany offers favorable tax policies for property investors.

You'll likely want to evaluate the investment with UDFI tax figured in.The Solo 401k trust would make the payments to the seller/lender and would also pay for any investment-related expenses.

He is busy working at the hospital and doesn't want to deal with tenants, toilets, taxes, trash, and all that haha

If you were able to increase the value of the property significantly after the rehab, then you could bring the deal to a community bank  to refinance and take the hard money lender out.You keep all the equity and don’t have to file a partnership return for your annual tax return, which can be costly.  

This appears to be a 'transfer tax' instead of an income tax.