Quote from @Josh Otero: Hi BP community, I know you've got some crazy tenant stories and I want to hear it.I'll go first:1) I was managing a 5 story apartment building and a dog fell off the 4th floor balcony because of the owner not paying attention.

I know that is a long pay back period but don't plan on selling anytime soon, plus you never know what nat gas prices will do. 

This is something I try to live by and teach my kids if I can - "A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly.

How do you plan on getting the houses?

The tenant fails to pay their last month's rent and leaves the place needing new flooring and paint.

You can use HML don't get me wrong but if you just put a little bit effort in to pre-planning and getting all your ducks in a row then going with a traditional community bank would be a better option not only for your current new construction needs but also for future acquisitions.

All new flooring, painting, throughout the house.

Earlier in your post you shared that your friend planned to pay the contractor invoice but at the end of your post you ask whether your friend should pay the invoice in full.....and this is after selling the property and presumably being recapitalized. 

Yet another reason, (albeit not in the top three) why all rental property should be in an LLC with a wife or child as a partner (even .1%) so as to file the Form 1065.Number 1 is liability protection, Number 2 is privacy, Number 3 is ease of transfer for estate planning, Number 4 is possible sale of the LLC to conceal sales price (also called drop and swap), Number 5 is having a single entity for financial reporting, Number 6 is brand identity.

It takes a lot of planning and hands-on dedication to create real profit.