I know some people do this but proceed with caution.

Clearly define terms, including an exit strategy, buyout options, and how proceeds will be split.

Good points.I'd add square, level, plumb - license, insurance, bond - using permits to follow codepointing out problems the owner doesn't realize they have that are serious. 

The proceeds could be reinvested into something with better returns or even used to simplify your finances(Like Bettment still offer 4.75% for new customers, and you don't need to do anything!).

That's $1,600 per month plus to pay debt, plus at least $400 in taxes and insurance.

Make sure you ask them good questions, make sure they carry insurance and that they are available year round. 

What kind of insurance do you use? 

A rent payment isn't enough to cover the DSCR payment, HELOC payment, tax, insurance, and maintenance.

The moral of this story is to have good home owners insurance!

Florida and Gulf Coast insurance should be a concern.