I make his payments each month...I collect rent each month...i make small $200 profit on 15 yr left.

The other option is a kaleidoscope of residential mortgages which just sounds awful, residential loans are a PITA to apply for.If they were in poor shape and this was going to be an extensive rehab and value added deal my bank would structure it as an interest only construction loan for the first 12-18 months.

I would like to start with rehabbing properties to build capital, and eventually begin collecting buy and hold properties.I look forward to learning more and contributing to this outstanding community of helpful people. 

I don't collect it, I have them pay it directly to SmartMove.

I wrote about this extensively in another post, but if you have to go the PMI route, ask the lender to give you LPMI (lender paid mi) and then buy the rate back down to where it was without PMI with discount points.Rather than paying 100-200 per month, you'll make a single payment of a couple thousand at closing. 

My biggest obstacle with investing out here initially is finding the type of property I want in an area that doesn't require kevlar collect rent.  

FR - 5397 - N - 05), “Federal Housing Administration (FHA): Temporary Waiver of FHA’s Regulation on Property Flipping; Extension of Waiver” , dated November 29, 2012 at http://www.gpo.gov/fdsys/pkg/FR-2012-11-29/pdf/201...View the Electronic Code of Federal Regulations at http://www.ecfr.gov/cgi-bin/text-idx?

In both those scenarios you could crank out the rehab and then collect a month or two of rent/payment rather than sitting on it.

One of the reasons we got into real estate was to be the kind of landlords who are not just concerned with collecting rent, but providing people a decent place to live that they also enjoy.

@Dave Godfrey have the potential borrower get an extension or pass.