It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

It may well form part of the bank valuation in terms of square foot, and it may be covered in the habitation license (the habitation license would cover house + annex), but it will be treated differently and need to be closed off for rental.

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

Keep digital records and pictures.  

As far as rate is concerned, you can usually go about two points over the current rate (less closing costs for a seller financed deal so there is no real expense there) You need to make sure the borrower can cover that.

Our cleaning fee covers professional clean, laundry service, and consumables. 

Two things not covered so far:1) If a buyer challenges a seller-financed transaction, the Dodd-Frank penalty is that the lender must make the buyer whole.

As noted, if your options are Reg D, private offering vs fully registered public offering, even if you are talking Pink Sheet (OTC) stocks, you have public filing costs, annual audit requirements, and likely more on-going expenses that have to be covered by the property(s) owned by the offering.  

There is loans that cover the purchase and rehab so you could explore that.

Investing is different from speculating, in that it’s data driven and therefor predictable and you have factors that play in that covers your downside and strengthen your chance of upside.