Since its my mom's money, I wouldn't risk it in something that I am clueless about.My mom will sleep better seeing regular monthly deposits in an account and two deeds to her name.

FHA also has a rule called “Net Self Sufficiency” meaning the total mortgage payment must be less than the total rental income on the property.

Once you hold that TIC for a sufficient period of time,  you could sell it to them, and do a 1031 on that sale.

“Would I sleep with one eye open and be cautious and watch for the indicators?

I've seen 5-15% of NOI, estimating each one individually, and other estimates.What number helps you sleep at night?

Since he is short on time he is going this route for a few months until he has sufficient time to look around.

However, your landlord is likely notifying you of  the complaint because there are sufficient complaints from her other tenants to warrant letting you know; concerned that other good, quiet tenants may leave if the issue is not resolved; and covering herself in case there is an actual drug issue. 

The way my friend does it lets him sleep better at night with better protection.

Cheaper/easier for you to buy an umbrella policy for that extra “sleep at night” cover.I’m going to run a report at work maybe and come back with real stats on likelihood of a large loss.For me, I am considering LLC for tax purposes depending on what happens with these new proposed changes.

What I should have done as you rightfully point out is to seek sufficient time to be able to get all necessary bids.