Though you didn't record the note to secure the property with a mortgage, you can still make it difficult for him to operate and potentially raise more money when new investors check him out and see his history.Don't take it lying down (so to speak). hopefully more people will chime in.

I lived and operated my REI business in portland for a number of years and am now based in Charlotte, NC.   

Now, someone told me that I could create an Operating Agreement detailing the arrangement with the contractor, the idea being to give the contractor confidence that everything is on the up and up, and he is adequately protected.  

The operator you go with is critical for a chance of success.  

If there is a facility, you will have a higher electric or heating bill....both to heat and cool the facility and to operate the units.  

I am currently looking for a multi fam where I will live in one and hopefully the other units will cover the mortgage and operating expenses.

At least an agent has a basic education and is supposed to operate within a code of ethics.

Just so you know, my goal is to learn to assign lease options w/o having to worry about getting in trouble with our local real estate commission for operating w/o a license.

The best advice I have it to study the state laws in which you operate.

It's hard to see how the small advantage of a few weeks is worth the unbounded liability of operating without insurance.2) The seller may discover prior to closing that their property has been improved.