Before making the plunge, I highly advise you to consult with a cross-border tax & legal specialist to determine the best entity structure to use.

He may offer suggestions on ways to make the deal work if it is not workable as you have it structured as well.So, newer folks can get more value than just the money and the more experienced can get the money easier than private and cheaper than hard.

Is this what it is, or am I not structuring it right

For instance, he took out a $10K loan at a supply company for supplies on the house; however, he never paid them a dime (on NET 30 terms) throughout the project.

Perhaps this information will help clarify the issue you are facing with structuring a deal as you propose.There is no statutory guideline with specific numbers that applies to your question.

Rental demand is easy to track down and take a look at craigslist and talk to some management companies to find out supply demand metrics.

When you add in the ocean and southern border, the reality is you've got half the land supply options most other markets have.That's why RE is so expensive here and why it's likely to continue being so. 

I'm curious how did you structure a loan for 5 years?

Certain legal structures can help securely and cost effectively own property in numerous states though.Please share here if you have any concerns about how to deal with potential legal liability in multiple jurisdictions.

My tenants are contractors, those guys you see working on the large upright structures of steel at a petrochemical refinery.