Keep in mind I dislike the slim margins, tenant damage and general under utilisation of money invested on SFHs if your intent is to generate maximum passive income.

It's gonna be slim pickens out there for you trying to self manage and rehab this one. 

Or, I could hire the work out and send him the bill; however, the likelihood of him paying would be slim.  

I was initially looking for multifamily deals but the deals have been slim to none so I have expanded my scope to single family residential househacking.Can anyone please provide any best practices?

The chances of you actually losing every dollar are slim, but things can go wrong, namely messing up numbers and underestimating rehab.

Rate would go up, but if you are qualified we can slim that gap down as much as possibleJack

Because the profit margin is so slim in TK, any major repair will wipe out the entire year's profit.

I also want to make sure that we aren't keeping it too slim for ourselves.

The issue Brian is putting forth is that if there is significant intrinsic value in a deal and it can be harvested by an expert operator, then mining this intrinsic value can make an apparently slim deal into a fantastic deal.

Additionally, remember, a refi on the new value will slim down the cashflow quite a bit, so be sure it's worth it to you at the end when you refi.