im in Orange County CA and there is a huge market here for room by room rentals here. i've been doing this for quite some time (over a decade now), and it certainly has its pro's and cons. my advice if you go about this is make sure you do proper vetting before moving someone in... not only for financials/ credit-worthiness, but also for temperament and expectations in a co-living space. we ask a lot of questions like "how do you handle conflict?"

We only require a soft credit check as well. 

They don't ask for any documents just do a credit check and you fill out their application.

Quote from @Jaycee Greene: Assuming you pay asking price, I'd estimate the down payment for something like that using a hard money loan (HML) would be around 40% of the purchase price and your monthly payment would be $2,600 with an interest rate in the low 7% range (probably need a 700+ credit score to get that).

It's not fair for his future landlords not to know about this terrible tenant.

WE dont pay a fee for the credit line as I mentioned just 1/2 point for each new loan..

We don't pay vendors by credit card or cashapp because it is far too hard to keep the accounting straight with a high volume of transactions to do that. 

Relatively small amounts of interest income ($1600+ per year) is the highest taxed form of income I have found if you have kids at home.After earning a few grand in interest, It takes away my child tax credits and gives me an effective tax rate of 70%.   

I have gotten a seller's credit for my 3 existing units but to be conservative, I will assume I am paying full closing costs here.At the moment, I have ~$25k in a HYSA and expect to save another $10k from my W-2 before I start putting offers in.

The major issues come to play as James pointed out when there is lack of disclosure to the seller and a note does get called and puts them in a terrible position.