This is the most complicated piece because you are essentially the mortgage originator (which might run into licensing concerns depending on how many times you do this and your state), and you need to make sure the person who is buying is a good borrower.3) close with a title company or lawyer (state dependent) who knows how to deal with this type of transaction4) set up an account with a servicer to collect the money from the borrower (not required, but highly recommended from note buyers)5) collect payments

It seems that the cost of the money isn't that great of a concern if the numbers are making sense on the deal.

I would call the concerned parties and make sure you gather paper trail.. call the credit bureaus, they will give the advise you will need to get the flag removed

Just a note for you since I was just talking to a client about this: if you live in a high-income state or have privacy concerns and are living the digital nomad lifestyle, south Dakota has an interesting residency status program that can potentially save you guys 10s of thousands on income tax and have great anonymity. 

My best advice is to pick the issues that are of major concern like roof, foundation, radon etc. but perhaps skip the leaky faucet or burned out light bulbs.

My concerns with selecting a servicer are the following: customer service, access to funds, access to education materials so I can learn how to stay away from prohibited transactions.

I'm in the Los Angeles County area so saturation is a real concern.

For this plan I followed the outline in The Ultimate Beginner's Guide here on the site.  

House hacking is a fantastic strategy, especially for beginners.

Is this a realistic concern?