I agree with the others when they say to hire a PM; a property manager will have access to better screening and fraud detection - and hopefully can add some protections in the legal arena too.

It's basically a legal 2-unit that can cashflow $900/month.

Or really they were ALL pre foreclosures when it was legal to do this in OR and WA laws changed in 08.

-The liability insurance acts as a shield between owners and tenants - creating a legal barrier that doesn't typically exist in rental properties since tenant agreement with with HomeRoom and not the owner.

And the cost of legal defense , even if successful, will drive the company out of business.   

Perhaps if your partner was a general contractor or handyman type there may be some merit there to reduce costs / increase profitability.If your partner enjoys deal sourcing, a better move might be for him to become an agent - so he could legally collect commissions from finding deals and managing properties for multiple people. 

.- but the advertising company still gets paid.He has to pay for accounting services, payroll services, tax services, legal services, etc.- they all get paid whether he makes money or not.So, what's your point?

I have never done this just thinking out loudNo legal advice.

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

Any legal issues I should be aware of in this situation?