For instance, one PM I spoke to has the following fees:50% of first month's rent to initialize tenant (+$50 just to draw up the lease)8%/month rents collected$150 flat for a renewalThis comes in at about 12.5% of gross rents in year one of a tenant's lease, and then probably closer to 9% in every year they renew.

In this specific instance I could get it done with personal money (leaving money in reserve just in case) and a private loan of $50K at 8% interest only with a balloon after 12 months.

The problem here is that in most instances it will require new construction and the savings by trying to keep things cheap is not that much cheaper than putting in better finishes. 

If economic parity between you two is not a problem (file it under "famous last words") - then yes, each can report his/her respective contributions on taxes.

For instance, I own a few investment property in villages that have a "crime free tenants" ordinance which requires the landlord to attend a training and the tenant to sign an addendum to each lease. 

Other than that what should I be asking them either of proof of ability to pay and/or verbal questions.For instance I'm thinking I should ask about their income but how much should I make sure they make or savings on hand? 

My attorney advised that I could put up a non-refundable option fee for maybe $100 - $500 dollars for a period of time that goes by and then increase for each # of days that goes by in the contract, so for instance:(Option Fee - not Earnest Money)$500 give to seller 3 days after contract is signed.If close hasn't happened within 15 days, give them another $500.If close hasn't happened within another 15 days, give them another $500. 

For instance, they are underwater or the home value is too high.You can look at the demographics of specific "carrier routes" (CRRT) within a zip code to pick the ones that have the highest rate of homeownership and desirable average price range.

@Jimmy Dudley  its sort of depends on where you live and closing customs.for instance on the west coast there is no such thing as a wet closing.. or having all parties come to the closing table.. simply never happens.so when we sell something here I usually go in and sign ( if I want to I can also just have them e mail docs and I sign and they send a courier to my office.. )this is done 2 to 10 days before closing.. then the buyers come in the 3 days before usually because they have their 3 day right of recession ( owner occ mortgages)  then the loan package goes back to the lender.. then the title company has to record in the morning.. and has to send recording numbers to the lender then the lender funds.. then the next day once this is done title company will cut checks or wire proceeds.. for us 100% wires we never get checks.. its always kind of comical when I am sitting in my office in Oregon closing a deal in some east coast state and the closing attorney sends me an email with the time of the closing and wants to know if that time is good for me like I am really going to be there..

For instance, if Dad has income and great credit and husband has great income and great credit, you use them.