I would assume only the NOTE would be held by the Trust, with the income from the Note flowing to the beneficiaries who would then pay their respective taxes. 

Be a good "mentee" - respect is a two-way street, you need to have respect for your mentor and they should have it for you.

With respect to #2, I was thinking about starting a property management business a while ago, since I manage a couple of my own properties.  

I respect your knowledge and love what you are doing on biggerpockets to help people improve their lives....thanks a million!

(I often wonder how they report the rentals on their respective tax returns???)

That same mortgage will also appear on your respective credit reports and will factor into any debt to income analysis for future borrowing. 

Respectfully,George

Manners and respect. 

Could you make a respectable return to wholesale this to another investor who is looking for just this type of deal? 

With respect to that, I am attempting to balance the JUMP IN NOW urge with the 'analysis paralysis' BTurner and JDorkin refer to in the BP podcasts.T-minus three months... goal/deadline for going under contract on an investment property.