If your family friend is truly a friend (s)he should be recommending that you purchase the home in a traditional manner. 

Understanding that this CR is what buys you the time you need to develop your system (this is where compounding comes in) that in fact becomes your a self sustaining/repeatable money machine.All three things mentioned above work together to form the system, which means the initial (and only) cost...can be applied to an unlimited number of uses of these funds, and makes that initial cost insignificant. 

You've probably heard of big Landlords losing property, but only because they were flagrantly violating Fair Housing, running a slum, or otherwise violating the law in an egregious manner.

I'm not saying bow down to every ridiculous request a tenant makes (and we surely have seen it all) but I am saying, that if the tenant is making a reasonable request for a repair, handle it in a timely manner.

Aloha,Be sure to restrict the usage in some manner, you do not want to end up with a garage full of hazardous waste and a "renter" that disappeared into the night.

I tend to focus more on the intangibles like the seller, neighbors, tenants, why certain things are operating in such a manner, general city/neighborhood feel, etc.

So Grant/Mitch have since disappeared...Folks, it is NOT a sustainable / scalable model seller financing houses to occupants.The worst example I even hear of today from medium sized investors here in GA, as of 2019, is doing the work for equity gig;  buy junkers that are not habitable (no heat, or no functional sewer system, or no servicable electric system, or solid roof) and seller financing a $30k house for $50k work for equity. 

(Seller shall have a right to cure if no choice is indicated.)If Seller has right to cure, Seller may satisfy this contingency by: (1) delivering a written notice within 10 days of receipt of Buyer’s notice of Seller’s electionto cure defects, (2) curing the defects in a good and workmanlike manner and (3) delivering to Buyer a written report detailing the work done no later than3 days prior to closing.

LOL.. like anyone would do this for them.I would never put them on title . or give anyone like this control or ownership in any manner.. a fee based arrangement sure I can see that.. but short of that my experience over the decades is this leads to litigation with minor partner..

With the amount of adu construction, possibly the manner of appraisals may change down the road.