I've been extremely passionate about investing, so I can break out of the endless job cycle and start making difference and helping other players in this wonderful game and I would ABSOLUTELY appreciate any opinion and advice from the community.

Contracts are written for a reason, to ensure both parties do as agreed, and if one defaults, then the other need to be compensated for damages, etc.

What steps should you initially take to ensure you can purchase a property, take care of the water issue along with other repairs and still make money on the deal?

Send him a letter certified mail to ensure there is documentation, then if he can't come up with the rent, proceed with the eviction process.You don't want this guy, no matter how nice he is, to take advantage of the situation.

To ensure I get the most out of this experience, I would like to know what are some of the executable steps I should direct my attention to.

The underwriters job is to ensure the items being submitted as proof of information related to the borrower such as income documentation or asset documentation are (1) acceptable to standard and (2) prove the concept.

The Fed might be shut down, but the local beaurocrats keep coming up with new laws:As of January 1, 2014, owners are required to ensure that all residential rental units have operable smoke alarms installed at the beginning of each new tenancy.

Penny wise and pound foolish, you want equity that can be in the thousands of dollars yet you need to save $500 or less, from consultation with a lawyer that can ensure your nest egg is safe. 

You need reliable team players, not lawsuits.

To ensure some of my deals with fund once in escrow, I put up an irrevocable standby letter of credit that is guaranteed by my lending institution.