Also, I sent you a request to connect and if you don't mind I would like to send you a PM as well for personnel recommendation. 

His only request was that I take out a life insurance policy equal to my half, basically, or equal to what he loans me if we don’t actually partner, and make him the beneficiary.

Im assuming you will not have a Property Manager make sure you have your systems set in place beforehand (concerning how to handle maintenance request, rent, applications  etc) and that you understand your State Tenant & Eviction Laws..

We would live in the basement apartment, and rent out the upstairs.I'm just concerned about the apartment not technically being approved.Only the owner of record can request that the city permit the apartment, so I couldn't do anything about it until I own the property.What would you do?

Your requested Code has been input and is ready to use.

We made a cash offer a little while back on a property and when we requested a Proof of Funds letter from our bank it took them over a day to provide the letter.

However, when a tenant requests an improvement I consider it.

You are not screening for income, but you can still look at credit report, talk to two previous landlord references and you can even request to visit them at their current home to make sure they are keeping the property in good condition. 

So does this mean now we enter into a month-to-month rental and I send rent request as normal until A. he vacates or B. he is evicted?

Did he ever tell you what the added costs were.Best practice for ALL added work is for you to request it and request him to provide a price before he does any of the additional work.