You're better off to ensure the contract states only units less than x years old are in service.

Would it be best to use an outside company for our rehabs in lieu of using his company, as to ensure he is invested in our company.

Find someone qualified to look at this type of home and don't cheap out; a good inspection can save you a ton up-front and over time.Also pay close attention to the foundation (assuming it's a rubble/stone/brink foundation) to ensure that its straight, not bowing or seeping water. 

You must protect yourself and getting an EMD usually ensures that a buyer will not back out of a deal.

And generally, people living someplace want similar things (a parking spot for all cars, laundry on site if possible, a dishwasher, etc.).Also, if you're going to live there for a year, you can take your time checking out the rental competition during that time, to see what's "standard" for the area and then make some of your decisions on that basis.Lastly, my understanding is that the 6% non-resident withholding is only an amount withheld from the sale to ensure that nonresidents actually file their RI taxes for the tax year covering the sale.

To use some hard money lenders a lot of times and to really ensure the private lenders position and strengthen your proposal, you should get some construction insurance.

Healthy cash reserves (which include money saved/earmarked for Capex) ensure you can hold onto your property and allow you to sleep better at night!  

The lease should be at fair market rental value (or slightly above) and the agreed upon future purchase price should ensure the seller is making a profit.

Do you have adequate earning power and/or reserves to ensure that HELOC gets paid back, should this deal not go exactly according to plan?

Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.