So let's look at the options.Option A: Pay Rent $3,000 a month.

- New builders have been given lots of incentives for months now - they pay closing costs, buy down interest rates, higher commissions for agents. - Possibly... in most areas of the country the market is a sellers market and the seller can get top dollar for their property.

It is likely that both you and your investment partner will need to pay taxes.

I found one self-paying tenant with a 530 credit score and eviction history.

I rent nice places to renters all the time and they take good care of the property, pay rent on time, communicate well, etc.

But if you took a HELOC, which tends to have relatively high interest rates, your blended rate (the average of what you're paying on your mortgage plus the rate on the HELOC) would likely be in the same range as today's mortgage rate.You'd also only be renting out one unit, but by selling it might allow you to get more than one additional unit and still grow your portfolio. 

So that by the end of the amortization schedule, almost the entirety of the monthly mortgage payment goes directly to pay principal.

It would just be so much easier to let B report all income/expenses than to have A & B split everything but A also pay B rent!

You may still want to consider opening up a separate bank account because there may still be some expenses that you pay for directly outside of what is paid by the property management company - I.E.

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.