What can go wrong?

I can be wrong on this, although I have shopped around plenty. 

@Tammy Elias tenants are always looking to scam the system:(You'll need to start the eviction process and let the judge tell her she's wrong.

You wouldn't need to keep an eye on other investments, just focus on the one and maximize your cashflow.If I can make a suggestion though...I might be wrong, but I don't think you started househacking to take the simple route. 

Buy on market, nothing wrong with that.

I would venture to say very few landlords correctly hold their deposits based on local landlord/tenant law but as long as the money doesn't walk away and is not wrongly withheld from tenants its highly unlikely wrongfully storing the funds will become problematic.

I understand that the tenants will paying me money that i will put towards paying off the house but it just seems like so much could go wrong.

The biggest issue is that forgetting to assign a location or choosing the wrong one can mess up your balance sheet, leading to inaccuracies.

Because I did everything wrong, started with basically nothing and STILL achieved financial freedom, I know for a fact that anyone can do what I did. 

A local couple who’se combined income is 300K and who sponsored the family’s immigration to US is willing to be co-signers for the family of 5.I am thinking that Party2 will put more miles on the house and may be harder to deal with in case of any complaints or eviction, though I am not an experienced landlord so I am not sure what are the factors to evaluate or what all can go wrong?