It just sounds like the BRRRR method but for business.

What is the best method for this? 

I know that I can go in, in either platform, and refund for days as needed without involving the "customer service" people.

Sure, in theory, the strategy this investor used might sound clever, but it’s also incredibly risky to rely solely on the compliance of a borrower—especially when they might not fully understand the terms or simply can't agree due to their personal situation.I have tons of ideas that might look good on paper, but I don’t pursue them because I assess the real risks involved.

Further, these “asset protection” methods are under constant creditor attack through the courts, meaning they are probably of benefit only a short period of time, UNLESS, true CONTROL of the asset is given up.  

I feel I am ready to invest again, maybe doing a BRrr method with cash out refinance or perhaps a flip.

One of the tenants we have already started eviction proceedings against due to non payment of rent and the other one we are giving 30 day notice to because they had someone living with them that was not listed on their lease and this person was involved with some shady things so since it was a lease violation, she gets a 30 move out notice.   

Diversifying involves buying multiple properties to reduce risk and increase rental income.

With regards to issues involving the contract, it's literally "Charlie Brown teacher" to my ears.Also, only offering MTM leases allows you to more easily mitigate a tenancy where someone is acting incongruent with your initial impression of them.

Starting small is okay; it's all about gaining experience and building from there.Networking is also super valuable, so get involved in local groups or forums (other than BiggerPockets).