Your proposed strategy may make litigation after a claim arises more complicated and costly for you to defend.  

As a property manager myself, I would also strongly recommend engulfing yourself into the landlord/tenant legislation that has been put into place over the last couple of years. 

And, importantly, fear around my ability to confidently show the Seller that the deal I am proposing is one that CAN help solve their challenge or problem (once I find out what that is!). 

He loved my proposal to l/o the house, rehab it splitting costs 50/50 while I lived there rent free during the rehab.

About 15 years ago contract for deeds were virtually eliminated in Texas by legislation which not only limited the benefits of using a CD, but introduced severe penalties for even minor issues of non compliance.  

Others are duplicative and require resources to confirm compliance with multiple regulators with overlapping jurisdictions.Further, the study noted that “[Three quarters (74.5%) of housing developers said they encountered “Not In My Backyard” (NIMBY) opposition to a proposed development, adding ~ 5.6% to total development costs and an additional 7.4 month delay.]”Wow.

He was very open and amenable to any changes I may propose to their contracts (pending their own counsel review). 

Is that viewed differently by the regulations being proposed?

Sometimes they’ll ask for contractor info and proposed construction plans.

Deductions are a matter of legislative grace and the taxpayer bears the burden of proof, both of production and persuasion.