Unfortunately the hardest part is installing the first tenant on posession.

Working with a realtor is extremely beneficial for both parties.

The deal is not going to happen unless both parties are happy with it.

Tenants love it and they pay a premium for it.As for property management, we definitely use third-party management.  

I would also want a more formal written agreement that states what she can and can't do, and allows for the arrangement to end by either party and the rent re-sets to market.

We had a top notch business attorney set them up because we have two family partnerships and needed the LLCs for defining our business practices and for determining the course of action if one of the parties should want to sell out or died.  

It's definitely a learning process as you go but the hardest part is to act!

Welcome to the party from another Louisvillian!

You might even need to break up the $700 for the first house if part is expensable and part a capital improvement.You really need to get this under control now before you grow any more.  

The 'better' alternative is as @andy points out  to borrow from an independent party, with recorded security interest, proof of loan term compliance... all in an arm's length transaction.