Does he have assets he (or perhaps you) can access to be compensated by - either voluntarily or if you end up in a legal fight. 

I don't think they do much vetting unless there is a complaint.

Without speaking to that, they are not answering his question.I was waiting for someone to point this out as I read the replies.most HML’s will require the buyer to use an LLC so it Can’t be a primary residence, which they can not legally lend on.

Not speaking from a legal perspective, but I've done this several times and have never had an issue.

There's a stark difference in tax rates between legal residences (primary residences) and investment properties/second homes. 

We would call the CFPB for clarification on what was/wasn’t allowed for advertising and they would refuse to answer, but would give us $10,000+ dollar fines if we guessed it wrong (@mortgagenmore).”On Taxes, is the 1031 Exchange still Legal?

This separation helps in maintaining clear financial records and simplifies tax reporting and financial management.Setting up an escrow account specifically for rental income within your LLC can offer several benefits:Financial Clarity: It separates rent payments from other operational expenses, making it easier to track income and expenses related to the rental property.Legal and Compliance: Helps in demonstrating that rental income is kept distinct from personal or other business funds, which can be important for legal and tax compliance purposes.Tenant Transparency: It provides transparency to tenants and other stakeholders regarding where rental payments are deposited and how they are managed.While it may not be a legal requirement in all cases, maintaining an escrow account specifically for rental income is a prudent practice that many experienced investors and landlords follow.

Not all PMs are the same.You can also look at buying a place with a legal suite or a duplex-you can live in one unit and rent the larger unit or the unit that will give you the most rent.Narrow it down to a few options and then ask them for pros and cons of each after you've made your own list of pros and cons.   

The people aren't the issue it's the market and legal ramifications.

In short, if it were me, I would not do that construction until I was legally covered by the leases.