My experience is limited, but I hope to contribute as is feasible as I take my licks in this arena.

There are limits to going lower and any of that money that isn't spent on property will be taxed (called the boot).Things get tricky when you do combos as an option, then you run into limits of how much they can be worth etc etc.

You could legally form a Limited Liability Partnership that would give you some protections.

His exposure was limited he said.

The deadline is very strict, and the custodian must receive the money by the deadline.If it's anything other than A or B - there could be some important complications.Once you acquire the property, ideally you should limit your personal use to no more than the greater of: 14 days, or10% of the total days you rent it to others at a fair rental price.If you exceed this number, your tax deductions will be limited.And when I say "personal use" it does not mean just you.

@Aaron cayabyab - FHA Loans have loan limits.

On a residential mortgage they will limit you to a certain debt-to-income ratio (DTI).

There is no limit to how many properties you can self-manage.

So if you are looking for an drywall guy you might ask the guy who does trim work and doors.In my limited experience most GC's will ask for 50% up front. 

Either your friend is hiking your rate to cover his compensation, or he put you on a lender paid mortgage insurance program to limit your monthly payment, but at the expense of up front closing costs.