I live (and will be operating) in Michigan.

So just by looking at when he bought them, the price he bought it for and what it's listed for now and the condition every property is in tells me a lot about how he operated. 

The advantage of this setup is the logistics and convenience (all done with the same lender), plus the fact that the re-finance amount is based on the ARV of the property (not the initial loan) and can be re-financed immediately (no freezing period).

I'm sympathetic to their situation but we are barely covering our moderate operating expenses.Should we?

I've been operating in all cash, and for various reasons can't take out a conventional mortgage. 

50% rule means your expenses should run about 50% of your income (and it will when you implement the proper operations). $495 x 6 x 12 = $35,640 gross income. subtract 5% vacancy and your effective income is $33,858.

Where you are operating will have some impact on the information you may request and should expect.Here in Canada, we may ask for an applicant for their Social Insurance Number (SIN)  {our equivalent of an SSN), but we cannot require they provide it.  

It seems like it should be easy on the surface, but there are a lot of moving parts in management and each company operates differently.  

This way you can determine your Rental income, net operating income and cash flow.Discounting appreciation, you make money on rental properties through leverage and cash flow.

That is completely different from knowing how to operate one so you do not set yourself up having it pierced for improper activities.