I've explored RentecDirect a little bit as an alternative.

Is this a dead deal now, or is there an alternative way around this?

However, the alternative is really expensive.

And it's better than the alternative (losing principal!)     

So I consider this a huge success in comparison to the alternative.

Alternatively, you could form an Ohio LLC.

I think that this could work, assuming you have AT LEAST one, but preferably two alternate exit strategies in place in case something happens and this guy cant honor his commitments. 

I was thinking of setting up this product - https://adr-products.com/You can get one on Amazon for $48.00 and it seems like a decent alternative.

Buy an apartment building, rehab the vacant units, and sell property once fully stabilized (with an alternate exit strategy of refinancing with a commercial lender).The acquisition and construction will be financed by private money, the renovations performed by a GC, and the property listed and sold via a traditional agent.  

Are there alternative options?