Subprime mortgage crisis indicatorsFrom the Journal of Real Estate Finance and Economics, Maxmilian Schmeiser and Matthew Gross reviewed over 20 million subprime loans from 2008-2014 to discover clues that lead to re-default and eventually foreclosure.After the financial crisis, they found that most mortgages were taken back by the bank (REO), sold at a loss (short sale), or sold at foreclosure auctions.In their study, they looked closely at loan modifications that enabled homeowners in default to renegotiate their loan to more favorable terms.

If you eventually find yourself needing to evict the tenant, a lease addendum will hold up in court better than an "unwritten" agreement.This arrangement favors the tenant as it delays any actions against the tenant, should they not pay their rent.  

As @Ben Stoodley mentioned, lenders strongly favor experience and it may be a great benefit to seek out a partner (looking for someone with 5+ completed flips or BRRRRs is ideal) for your first few in order to build up a track record.

Meaning he wont partner with me on a buy unless the numbers are VERY VERY in favor of, at least, breaking even. 

Not bad overall, but also not the simplest path to real estate investing considering you could plonk 25% down on an already-completed-project right out of the gate and ski p all that variable middle-ground.With construction loans or other debt-for-your-project instruments its often more simple to get more favorable LTVs and LTCs for whatever reason.

However, I have also heard that the laws favor the tenants in Illinois.

Not only do rtp ratios make no sense and your cash on cash return will be negative (especially if you are paying less then 20%) but the laws are in favor of the tenant and if they stop paying rent then it’s going to be months to a year before you get a new tenant and thousands in legal fees.

WFH trends all bode incredibly well in Philly's favor with being wedged between DC & NYC. 

I'm going to set up my LLC in Wyoming (even though I live in California and properties will be located in other states, Wyoming has very favorable LLC laws).Is this something I need an attorney for?

-REO purchased during a very favorable time in the market (not favorable according to the naysayers of the time...).