at bare minimum,  start by providing a written receipt each month stating the amount paid,  any balances owed and their category  ('rent" or "non rent" - it makes a different now)  -  both yourself and the tenant should sign the receipt. 

You might already know this but you can use FHA to purchase up to 4 units on the same property and lenders will count about 75% of the rental income (basically counts as your income) to offset the PITI (principal, interest, tax insurance).

Also, say you're doing a 6month loan in August, you could have in the agreement that interest is paid upon principal payoff.

If you keep exchanging and die before you finally sell, then all those taxes are wiped off the slate and the person you leave it to owes nothing. 

Cash flow is not necessarily taxed as you are entitled to depreciation which is a non-cash tax expense.An LLC is simply a pass-through vehicle and would not decrease the amount of income tax that you owe.

Did you say I could owe the late fees and I could be entitled for landlord to pay me interest on my deposit?

I would then pay the monthly insurance payment along with the note I owe him.

I currently owe 56k( mortgage will be fulfilled in Sept 2028) on the property with my mortgage with insurance and property tax is 917 a month and the HOA fees are 300 a month.

He does not pay and is not responsive to the management company I hired.Eventually he tells them that I owe him 10,000.

If you've already got a quote from a lender for that amount of principal at that interest rate for the 12-month term you specified, that's awesome.