Find a place that is in good enough condition that people can live there, but has outdated kitchens and baths, beat up hardwoods, desperate need for painting and other cosmetic upgrades.  

My credit score is good enough to start investing and get financing. 

I believe that he owns his properties in his own name and I don't see any way around this because it is financed as an owner occupied property.Memphis is a solid market for rental investing so you should probably find a decent home that you would want to live in at a good enough price to rent it profitably at a later time.

and welcome to the BP forums. ill post the expenses i factor in when i analyze a deal. u can then put in your variables and determine what your deal looks like.Rental income: 4000Maintenance: -600Mortgage interest: -837.5Vacancy(one month): -333Management fee: -400Insurance: unknownTaxes: Not relevant todayMortgage principal: unknownUtillities: unknownMarketing: unknownWhen you determine these monthly costs you will come up with a monthly cashflow. then you must decide if your return is good enough for you.

They all said I need to talk to my CPA and I better hope 2 years of schedule E is good enough because I can't prove future occupancy without a written lease. 

You need to have good enough CREDIT to qualify for hard money and also for conventional financing in case you need to refinance out of the hard money (in case it's taking you too long to sell a house).

First- estimating operating expenses and vacancy at 50% of gross rents is not good enough.

It's not perfect but good enough to get started.I have to agree with Scott about your grocery budget.

Many investors will choose a "good enough" solution for a flip (morally questionable) or a professional repair if its  a long term hold or a well done flip.

The big problem is that you're locking yourself into using him as your contractor for as long as he's an equity partner -- for me, contractors are the biggest wildcard in this business and I'd never want to lock myself into one.What happens if his quality isn't good enough?