The strategy worked great, but without having any experience with the loan product, combined with signing a sales contract that had removed the protections for me regarding contract termination and return of my $10k earnest related to the approval of funding, it made for a very stressful process. 

To keep it simple the blue states usually afford tenants the most protections so IL and NJ are no stranger to things like this, whereas Oklahoma and Wyoming might be. 

Consulting with legal and financial professionals will help protect both your interests and create a solid foundation for the partnership.

I've never bought a property this way and curious if others have done it and if you think it's a good idea and how you make sure to protect yourself. 

I’m wanting to have consulting and deal structure to protect from heirs, bankruptcy, death, due on sale.

All of the DISCLOSURES signed by buyers and sellers are to protect them, and disclose information.

You are exempt from the "source of income" protection though, which means you are allowed to deny an application just because they have a housing choice voucher, which would not be the case if you owned more than 4 units. 

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

In my opinion, it doesn't sound like a bad deal.10% is more than you would get in treasuries and corporate bonds36 months is not a super long period of time.Seems like you are protected with 1st position.I would just do some background on the company - How long have they been in business, financials on how the company performed for the past 2-3 years, along with some background information on the sponsor/founder of the company.Best of luck.

Yes I suggest using an LLC to protect your investments!