With that said, I've met with another rehabber in my area (a member on the forum) to discuss possible partnerships on a deal-to-deal basis, barring proper due diligence on both of our parts.

Any place you could afford to buy just starting out would probably not be the kind of location that would ensure the success of your store (high-end shoes require high-end buyers, who will not be hanging around in low-rent areas, right?)

Many newer folks use their own RE agent to ensure that someone is representing their interest.

If this is the case, could someone tell me the proper & legal way to do this?

Lastly, any recommendations on how hard my friend should push back on this or any other questions he should be asking to ensure that any risk is mitigated?

I am wondering what is the proper fee's for Both.

Jennifer,Yes, you will be required to file a tax return due to the amount of income you earned regardless of what the net income may be.You should file it regardless of profit or loss to ensure you start the statute of limitations for audit.

You may want to ensure your not buying someones litigation landmine.

There should be no issue if your seller is doing business properly.

I hesitate to mention how loans can be designed sometimes as I know we have a bunch of "thinkers" here that may jump on something thinking they will know how to DIY something, so I really suggest the use of a mortgage originator to ensure affordability and an attorney as to compliance!