Got under contract and then negotiated a large amount of seller's concessions during inspection period.

, clear laminated instructions inside the unit, etc.Also very important to consider scale--if you are planning to have several STR's in the same area, then it's wise for you to invest time now to build your team there and manage the place without a co-host.

Would I have him deed the property over to me, and then have the paperwork be put in that we would build him a home first?

If a DSCR then questions are prepayment penalties and other terms of the loan so you understand what you are getting into. 

If that is your primary motivation then I wouldn't encourage that.

Then you eventually have to demo it.

If you turn any two "bonus rooms" (rec room, office, formal dining room) into two more bedrooms, then you're at $5,950+ per month—a 138% increase in rental income.Now, imagine scaling this across multiple properties while keeping lower upfront costs compared to multifamily properties.

Then I would like to begin investing and renting residential properties.

Right now in DFW area it is probably cheaper to rent then to buy. 

Then add a couple investment properties to be held in title by one LLC together.