I'm a mechanical engineer by trade but ive always been interested in real estate.

Are you looking for how to set up the finance side or how to set up the mechanics of it?  

I truly think that's because people take advantage of that friendship and perceive you to be an easier "mark" than the auto finance provider, for example. 

Did I say he was driving a beater car with mechanical issues. 

Been creeping for a while but I'm in the market again so thought I'd enable my posting capabilities to see what the results would be :)I'm gainfully employed by day in the auto industry and have been investing in buy and hold residential real estate now for more than 15 years (wow I feel old), starting with a slum lord "2% rule" rental in downtown Kalamazoo which was my worst nightmare, but a great way to learn the ropes - lost $2,000 net net on that deal when I got out but it was a very cheap education.  

We pay the General on a draw schedule just like the Subs... you can also make out the checks to both the sub and general and then let them negotiate them.In Oregon its critical because properly filed mechanics liens are super liens they step in front of the bank..

so after listening to all the podcasts I read the recommended books like 4 hour work week and land lording on auto pilot.So I thought I would as his others are systemizing your buy and holds?

Auto pilot is not the best option.  

Some details: Paying cash, so holding costs will be very lowRoof, siding, plumbing & mechanicals are new or nearly newHome is in rentable condition, but not up to our usual standardOur current rehab project will have us fully occupied at least through the end of the year.If we go with option 1 the house is unlikely to appeal to a more desirable tenant, but option 2 will not get us much more rent.

I would fill out a 1003 app, get a 12 month lease with 12 month extension if she pays well, send her to a mortg loan originator with the 1003, give her a ROFR (right of first refusal), send her to upgrademycredit.com to improve her FICO, go to the bank and have her do a auto withdrawl savings for 1/24 of 3.5% for 3.5% in 24 months to get a FHA loan later in 24 months.1003 app