In the United States, when credits are applied to a purchase price the agreement becomes a financing contract and these contracts have been identified as predatory lending arrangements under the Dodd-Frank Act.

I am now working with a lawyer to prepare the operating agreement and offering documents.

Some properties also require a lot of renovations (sometimes I estimate 20k minimum when a 1600 sq ft home needs a complete interior finish)?

Stick to a qualifier, set a minimum income such as 35 times the rent, minimum credit score such as 650 and no delinquencies in the last 3 years, no landlord and tenant court, at least 2 years work history, etc...

Should I be trying to acquire properties using an agreement of sale and then doing my do Diligence, I.e, inspections, funding, etc.

@Nicholas Lohr, how we handled this in 'simplified language' in our LLC Operating Agreement is this, using rounded number for simplicity - 1) We bought our rentals based on a price of "100 times monthly rent", meaning a duplex bringing in $1500 a month cost us 150K. 2) That is also the price we agreed to value them at if/when someone wants to sell their share.

Run the credit check / background, income verification then the deposit and lease agreement also signed online.

The numbers you throw out actually sound to me like the realtor and contractor are in near agreement.

@Kera Covani fannie mae requires a minimum of 6 months seasoning so anything more than that is a bank "overlay".

We have a verbal agreement that the lease will be $750/month, plus $25/month for a pet (dog), and security deposit of $775, plus a $300 pet fee.Thanks for your help!