If you learn how to use Hard Money loans properly and how to find good deals in need of rehab, there are plenty of areas of the country where you could buy 3-4 rent properties in solid middle class areas with good cashflow.

One thing I’d stress is the significant difference between Detroit proper and the surrounding metro areas.

You will need their advice on your state & local laws to properly proceed.

Can anyone recommend software which would accept monthly payments (from me to seller) and create proper 1099 forms for tax purposes at year end? 

It's properly leveraging (not over leveraging) the asset that pays off.  

If the tenants don't care for the pool properly, it could cost you thousands to fix.

2) Their contractor must be properly licensed and insured and we require copies of all this.

File an eviction with the court and provide the proper notices (e.g., 10-day notice to pay or vacate for nonpayment of rent).

It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees.

Offer to pay them off in 5-10 years at a higher interest rate.