I started listening to the podcast and reading real estate books about two months ago, and I’m excited to take my first step into real estate investing.I’m currently in Spokane, WA, and I’m pre-approved for a loan.

Going forward it would be good to specify that your property management software is the only acceptable method of payment in your lease (if not done so already).It might also be a good idea to check the pre-existing lease to see if they have any clause like that (sounds like you already did that).

If your friends have a rental they should hire a tax professional. 

The intricacies tax planning with a rental are worth hiring a professional, even if you just do it once for an overview. 

Or did the buyers authorize Escrow to pre release to the builder ????

Consult a tax professional to optimize deductions and explore strategies like Real Estate Professional Status or short-term rental loopholes to apply depreciation to non-passive income.This post does not create a CPA-Client relationship.

I am assuming that even if you strucutred it with a higher purchase price (85% of value) and pre-paid rent it would potentially still be frowned upon.

From what you wrote it sounds like the rental you own is your sole, pre-marital property.

While the initial years might not be financially lucrative, the knowledge and skills you acquire will be invaluable.

Along the way I've learned a lot of trade skills as well which goes a long way helping to maintain assets.