Usually I like to use mom and pop outfits for repairs.

Are there ways to mitigate this risk or protect yourself, or does the technical  "legality" only matter if the unit is unsafe or not properly outfitted?

This complicates the partnership as it dilutes the value I can bring by assuming the risk.In my experience so far there are HML's that also fund the rehab and some that do not, so how is it any different in underwriting's eyes if I just never take a draw with an outfit that includes the rehab funds? 

His group does property management, and they are a sharp outfit. 

They are a nationwide outfit, but Mike has been moving and shaking in this region. 

I’m thinking about just taking on one outfit that I can Renovate and rehab all of my new projects.

At that point, you call American Pacific or a similar outfit.

Any recommendations for forming an LLC in AZ or TX - I'm referring to an atty or some such outfit to help make it happen quickly.

I believe they only have 2 or 3 employees, so a very small outfit with no overhead -I assume that's how they are keeping their costs low?

If you're the type of person who would go to an outfit like, for example FCI Exchange, I personally would prefer going to a purchased list of note holders with names, addresses, LTVs, broken down by position (1st, 2nd, etc and I myself prefer firsts all day long) and property type... some of them will be ready to sell sooner, some later and you won't have to go through a middleman.