Running your numbers using a rental rate of $1,600, a $75k down payment,, using the 50% rule and estimating a 30 year mortgage at the remainder with an interest rate of 4.5%, the property will put $224 per month in your pocket in profit.

We negotiated an owner carry lease option agreement for the property (with the help of a lawyer).The basic terms are:·Lease period of 5 years·All lease payments from years 4-5 will be applied to the down payment·10% down (due after lease period)·4% fixed interest rate·Loan is due 15 years after lease (payments are calculated using a 40 year amortization)·The purchase price of the property will be based on independent appraisal(s) in 5 years, not below 750k, and not exceeding 950k.The business is doing far better than expected, and we are now looking for a second school to handle the overflow.

I like the idea of using as little as cash if possible and get the two properties.

Only my own when he was two and decided to draw on his bedroom wall ... fortunately we painted his room using a paint intended for such abuse and the crayon wiped off easily.  

This will make it easier to apply Kilz using a sprayer.  

If I'm not using a title company, do I need to collect an EMD or just have the buyer provide proof of funds?

If I understand your scenario correctly you are wanting to purchase a property using a private money loan (which is also covering the rehab) and your exit strategy is to fix it up and put a tenant in place (stabilizing the asset) and then refinancing the property using a conventional bank loan.

Plus you may end up using a lot of your time entertaining and researching people that have no interest in selling. 

It does if he paints over silicone ... your painter should be using a latex or other paintable caulk and it wont crack the paint, id be very concerned about a painter who makes that commentagree with Aaron, painter caulks 

If I were in your shoes, I would consider using a property manager.