So by understanding how much cash flow you need will determine the types of deals you target to purchase.As a CPA I always suggest forming and buying property in an LLC as it gives you flexibility from a tax perspective and also has legal protection.

I've learned that you get what you pay for and many people are not properly protected when they set up their own LLC. 

Goal is mainly to protect myself and to keep accounting simple and centralized; also taxes organized, etc.Thank you-Chad Hurin

For a bit more rehab, could turn it into a 2/1 with an attached 1/1, and even reno the garage for another 1/1, with good rents over the winter months. 2) SCRAPE AND BUILD: On the other hand, I approached a high quality local developer who proposes we do a JV- I bring the land, he brings his reputation, expertise and oversight of the development and construction, and clients- he has several would-be buyers looking to build in the area.

Not my area of expertise, but I am pretty sure titile company will want to see some evidence of appropriate estate administration. 

although sub prime was very predatory so those folks have a beef to a certain extent but then again many who fell for sub prime needed better primary education at the end of the day so they could protect themselves..

What terms and conditions should I add to our contact to protect the interest of both parties?

It should not make a difference for taxes, although I am not an accountant, so I can't say for sure.I'm also not a lawyer, but the LLC would be to protect you from liability claims.  

There are too many factors to consider.If you're simply looking for legal protection, a much simpler option is to purchase umbrella insurance of $1 - $2 million. 

For that reason, I would recommend requiring a two-month deposit or first/last/deposit as additional protection against them skipping town without paying their last month of rent.