Id recommend the single-family rental because you have more control and you don't need to worry about some greedy operator screwing it up 

They don't buy it and operate it.

A broker shall not be responsible for supervising, nor shall the licensee be responsible for operating, within the scope of the brokerage or within the requirements of this chapter, activities that would be considered property management, including leasing, maintenance, and repair, so long as the real estate being managed is "individually owned" or "entity-owned" as defined below:(1) "individually owned" real estate is real property in which the licensee holds an ownership interest; and(2) "entity-owned" real estate is real property owned by a corporation, limited liability company, partnership, or trust, within which entity the licensee holds an ownership interest as an owner, trustee, partner, or officer, or in another beneficiary capacity.

There's a ton of blue collar and healthcare jobs that are providing a tenant demand for houses in that rent range, and more to come with Blue Oval City expecting to be operable in late 2027. 

It should be noted that the cases were prosecuted against companies that owned and sold thousands of properties nationwide, not against small time operators, but anyone who attempts to follow the model is better off hiring a well versed in the subject matter attorney and be aware of state specific restrictions (like in NY, Wisconsin and others) on Deed for Contract agreements.  

In this case, you would draft an operating agreement that specifies each partner's role—your friend providing the cash and you handling the rehab and management—and that profits and ownership are split evenly.

The investors must be provided a Private Placement Memorandum, subscription agreement, and operating agreement.  

Although he is a banker, he thinks having the ability to operate as a broker and place loans with 30+ other lenders, in addition to his bank, is the "best setup."

Moving forward scaling with hard money loans may be the best bet and would avoid the headaches of living in a construction project. 

This isn't 2011-2013 days but many people are stuck in that time period STILL.As I finish my licensing study, I'm very grateful I chose this route as opposed to being a one trick pony.Wholesalers did themselves in by their method of operating.