My wife and i always had a goal to purchase a few properties that would produce residual income and supplement our retirement (I'm about 5 years away from retirement).

Same principle as receiving residual royalties for a one-off burst of creativity.Also, this does not prevent you from using your "connection guy" for other deals too.

Private lenders and banks might be a better solution for you as well so this way you guys can keep all the profits at the end, and if you and your partner want to keep these homes after you purchase/repair them and make residual income by renting them out, banks and lenders will give you that kind of flexibility!

@Charles Ferguson Depending you cash availability and long term goal (fast cash vs. residual income) I could either assign or hold.

@Brad Klock  I am a buy and hold residual income all the way guy, so take my advice with that grain of salt.i would rent that all day, unless you have reason to believe the market has peaked and the neighborhood will soon be declining. 

Don't consider the cash flow as disposable income until you reach your minimum residual income goals. 

Many of these homes are purchased by parents of students as a cheap housing option with some residual cash flow. 

And of course these were short term 24 to 36 months.. but in our bizz it worked great.. we did this on residual building sites we sold on contract after we logged the property..

I recently acquired a new rental property.  It was built in 1910, and there are a lot of things I like about it.  It is currently in a C type neighborhood, but things are improving, and I think it will be a B property...

Consider your complete square footage and break down the details for each item.For example: cheap vinyl flooring on 600 sqft @ $0.89/sqft + 600 sqft underlayment @ $0.29/sqft + adhesive = ~$750