(in this situation, does he pay his bills)You must plan for the worse in the sense that this IS a business and should be treated as such.

Treat your rental property business as a business and plow as much of your earnings (W-2) and cash flow (Schedule E) in to reserves, future down payments and debt elimination. 3G Capital has used this approach for 30-40 years in brewery purchases and is now the world's largest brewer having started with no beers sold.

All that matters to me is that they treat my property and neighbors with respect.  

If the pet rent is incorporated into the rent, they won't care nor will they know, but it will feel like they're being treated as responsible adults rather than as children.  

Just start building trust (through doing what you say you're going to and providing value) with a handful who regularly buy properties and treat them well. 

Hi everyone,Hope the day is treating you well.

@Missy H. is absolutely right that you can learn everything on youtube.The only thing I would caution you is that you don't want to treat your tenants like friends, and your friends probably don't want you to treat them like tenants.  

Later, it's sold and I receive 20% of the net profit.This is purely a money deal on my end (no involvement in rehab or rental).Question - If the property sells quickly (say, within 3 months), and since my profit is paid through a security agreement (I never have title to the property), how would this be treated for tax purposes?

They have no problems breaking the lease early so I wouldn't treat the situation as between friends.

I treat it as an add on and I can raise rent with 30 days notice if they use more than the historic average.