It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

Technically it would be best to get a C Corporate or S Corp. to flip properties and since you are considered a dealer if you do several properties a year and this could have negative tax consequences in an LLC.

If they seller finance, we have the deed, but they cant 1031 because they would need to find a property ASAP which they want to avoid.

Again, consult your tax accountant. 

Assuming property taxes + insurance added don't go above $1,100 total, you could maybe make this work. 

Keep in mind taxes go up as do rents.

I recommend that you look at Notice of Defaults, Vacants, Tax Liens or Probate. 

You get out there and put deals together with your eyes wide open to avoid as much as you can. 

This protects your investment and gives you leverage if there are issues.Other Tips:Make sure the lease explicitly defines the move-out date.Conduct a thorough walkthrough with documentation before and after the lease period to avoid disputes.Handling a seller-to-tenant situation can be tricky, but with the right precautions, it can work smoothly.

Hi Ricky,Being in operation for 10 years with mid seven figures of assets and NNN leases,it would be wise to speak with your tax advisor regarding if the tax set up should be an LLC, an S-Corp  or a C-Corp.It would also be wise to speak with an asset protection attorney to find out if this is something that might be beneficial to you in that area.