I would highly recommend starting with buy and hold, flips require a whole new level of cash and expertise, not saying never do it, but to start out-- it's a learning experience.The best ways to increase your credit is 1) pay on time and in full, 2) never put more than 30% of the limit on  3) Every year or so, ask for an increase--- it amazes me how people don't!  

There are many, many other reasons and examples of how the business model you are thinking of could easily go eschew too ...Much better off staying local and self managing ... or staying local with a PM that you can closely oversee to validate that they are taking care of your business, and if not much easier to fire, take over in the interim, and then replace them.

I know the owner personally and they are willing to finance a residential flip if I can come up with a legitimate business model.

I have 0 expertise about fixing a house.

He doesn't know much about real estate, neither is it his area of expertise, so he will be bringing nothing to the table except money.

These are model tenants and we've never had a problem with them for two years we've had them.Has anyone else run into a problem like this?

@Mitchell BoatmanIt sounds like you have a good strategy as you have people that have the expertise to help you achieve this path. 

We manage all over the country, and we focus on common pain points of investors, and then we refine our business model to make sure no client can every say we caused them similar pain.  

So this first deal was a rehab and rent play (it was carefully underwritten and I am glad I left some buffer in my underwriting model)Spend many weekend trips up there, and worked with a GC who is not bad, spend overall approximately $30K into the house.

Best of luck and I hope you find a client that fits more into your business model!