I would stay away from long term contracts and pay by the month to start if you are using a service and then after you have real world experience with it, you can sign on for a year for the discount.

So you're going to have carrying costs with this , as well as opening the door costs , as well as capital injections by both parties of an amount to be able to pay the bills of the llc just to survive as well as to grow business for yourselves . 

We would be paying more monthly i we bought the place than we would be if we were just purely renting. 

You could even negotiate into the contract that if the neighbors qualify you don’t have to pay the full leasing commission If needed some cash you could always do a cash out refi and take a small amount out.

Meaning that if your expenses exceed your expectations, or your vacancies/non-pays exceed your expectations, and you don't have enough buffer in place, you'll have to come out of pocket to avoid losing your assets.

In fact, you should pay for property maintenance, not expect the tenants to do it.

Are they paying double market rent?

Sometimes you will do bad and you will be stuck holding the bag and NOBODY will bail you out.If he did a great job give him more business, pay him on time, answer your phone when he calls, and support his business.

A 1031 exchange is a tax-savings strategy that allows investors to postpone paying capital gains taxes upon the sale of an investment property by reinvesting the proceeds through the purchase of another property (i.e. a like-kind exchange).

I guess the proxy might be what the person is paying now provided this isn't their first.