I am a longtime landlord that has normally just rented my unit to individuals after I complete my normal background and credit checks. 

Also, sometimes you hire uninsured people, e.g. a cleaning crew at the end, so having the insurance is rather justified at that point.For better or worse, if you can pay everybody with a credit card, you don't need to file 1099's..

But it does happen. the major risk is to the person you bought the home from. its their credit at risk.and of course if you put any down payment that would be at risk as well if things got bad.when you go into these deals you need to know if the bank does call the note that you can refinance and pay it all off or you have the cash to retire the loan.. anything short of that and your at risk .

When screening potential tenants, be sure to check for credit history, rental history, and ask for references from previous landlords or roommates.

Typically 30Y fixed, refi into an LLC, low doc loans that don't report on your credit. 

As soon as I create the LLC, I go to the bank and open a checking account, savings account and apply for a credit card in the name of the LLC.

We would love to connect with anyone that knows about investing in this area and may have any tips that could be helpful as we begin our journey here!

Here is a little tip I learned. ...

Credit is 800+.I have ~$120k in an inherited IRA that I could liquidate as well, but would prefer not to if at all possible.House #3 is least priority and could be used to offset the cost of the buyout on #1, but it cashflows so if I can keep it that would be great.I know it's a tough rate climate, but I'm looking for any creative options, and lenders who operate in all three markets that could help streamline the process. 

Get a first position line of credit larger than what you plan on using (Ridge Lending has the All in One that would be perfect for this strategy).