What is customary to actually get on paper for a property like this?

Loan files get papered with proof the home was NOT moved more than once.  

We just had some prospective tenants turn in applications and they said “non-smokers” on the application, but I noticed they smelled strongly of smoke and even their applications (the paper!)

They also provide one on one training and walk new agents through the process from building your network, listing properties and completing all of the paper work for a sale.Their splits are a bit higher from what I understand - but the training they provide is more than worth it from what I have heard. 

They put it up on a tablet if in person, and it not only makes them look 'cool' but less paper, easy to reference, data storage for waiting lists, and you can always print the application if need be.And echoing @Christopher Giannino We charge whatever the credit check fee is, and apply it to the 1st month's rent if accepted. 

I store this money in a safe as I have no legal job on paper as I file no w2 or anything of the sort.

Don't you just go to City Hall, present your settlement papers and stuff and get the license on the spot?

In your scenario, you can write off 40k this year, put that against your cashflow and EQUITY, your operating at a paper loss. 15 year mortgage, your gaining equity at a fairly decent rate and your tenant is paying it!

They advertised it in the paper for close to 10 years with no negative complaints.

On paper, he would be able to make $50,000-$100,000 annually on increase in value of the property he had debt on. in that timeframe, the amount he was making on paper was significantly higher than what people were making on annual salary.With that thought in mind, I would lean towards the content of leverage is King.