Keeping the money in the stock market is a bit more risky than what I would want for him.  

Hope you are informed on the issue of proper licensing for a PM.If I may be so bold to say, stop counting how many units you own and making decisions which can be risky just to create a bigger portfolio. 

I was planning on putting on paper a "Tenant Selection Criteria"  and stating that a dual income household is preferred as 2 incomes are less risky.   

@Jack Hensy  cap rates tend to run with market risks.. low cap rates are very low risk IE investment grade.high cap rates are high risk  Junk Bond.. has to do with the quality and income of your tenants

There are three major things that make that a very risky, if not impossible strategy.1) Small updates are not going to affect the appraisal at all.

What risk is there to the landlord if the renter does not?

I work with a lot of developers of raw land and as a general rule I find it is an incredibly risky asset that requires a lot of expertise, patience and (often) intestinal fortitude.

It's a little risky and ties up my credit though, so I am a bit hesitant to do  that.

While the benefits and returns of real estate investing far outweigh any other investment vehicle, it can also be risky without a lot of preparation and knowledge.

I lend to JV partners quite a bit and would never consider taking less than 50% equity for assuming 100% of the risk. I