Giving a bit on some terms in exchange for value is fine, but I'm having trouble seeing where the value to you is in this...

I have lived in several 3rd world countries that looked like a fine kingdom by comparison.

Your recourse would be to have some wording in the lease that states all fines and fees(water bill) will be considered rent and all funds received will be applied to them before the monthly rent. 

Also if you have enough cash without it then there won't likely be any "seasoning" issues but if you HAD to use that cash you would want it sitting in the bank for a couple months so they don't give you a hard time about odd huge deposits.Also since you said you would live in it to start at least the last plan of taking out a HELOC on the new place right after buying it is totally fine.  

I'm sure there are better options for some out there however it works just fine for me and it's free!  

Schedule E on 1040 will be fine.

lets see, ive rehabbed nearly 60 mostly vacant dumps and turned them into decent ( rental) to excellent (flips) places to live, now generating tax revenues, water bill revenues, env fine revenue,..where once they did not, improving the looks of the neighborhoods for neighbors and the city simultaneously.

If I invest in TN, is it fine to have my LLC in WY?

If you've got the dough to okay off a called due, that's fine.

If I have a relationship with my investor buyer and we have done multiple deals together and he doesn't care how much I make as long as he getting the property at his price, then a straight assignment is fine.