Opportunity cost is the name of the game, in a fiat system where we create money out of thin air; Money now is more valuable than money in 30 years.

So, for a cash sale of $27,500 you might give an earnest money deposit of $1000 making that 5% fee $50. 

He had the money from a house sale.

If the partner is simply lending money that will be paid back with interest, then having them in an LLC can be a problem.

@Alan Mills First of all, are you sure you are saving money by not using an experienced attorney?

Anyone know of an institution/bank/whatever that lends in WA state willing to do a purchase money second up to a 90% CLTV? 

These deals I analyze have come from borrowers looking for private money.

Take those things into consideration as you take on the challenge and call a property manager if you get in over your head.HOWEVER, deciding to use a property manager in the beginning when screening the right tenant, (we call them Residents), highly increases you likelihood of success as a CASHFLOWING investor. 

Thanks for clarifying, it is amazing how many people spend money bidding but don't understand the simple basics. 

My tenants have actually saved me money resolving issues for me. 7) Know / learn the costs of things.