If not, I highly suggest it!

I suspect maybe something like Hagerstown or Cumberland, which yeah are Class D like markets with declining populations, high drug problems, no strong job base which leads to non paying tenants.

Raising reserves makes sure they are present day one, but also dilutes overall returns. 

Otherwise, if you already bought the property in your name and use QCD to transfer to LLC it's easy to track.3) Getting properties off your 1040 tax return: once you accumulate enough real estate, for various reasons you may not want the proeprties to appear on your Schedule E.

Joe its all about NPV  and rate of return for investors.. either way your going to take a pretty big hair cut out of your equity to do what your wondering about. 

They have come to me about buying the home but I have a collection account about to fall off my credit in a few months so I am not sure I would qualify (in addition to my income may not be high enough).Are there any workarounds to maybe purchasing the home?

I highly recommend learning those strategies, as you can own limitless properties when buying without using bank funding!

I highly recommend starting with a basic househack, easy barrier to entry and gives you a crash course in being a landlord who lives on site.

That approach makes a lot of sense—focusing on key value-adds like bathrooms, curb appeal, and open layouts can really improve returns.

You should create a presentation to demonstrate how you intend to use their money and what they can expect in return.