You may want to check out this thread:https://www.biggerpockets.com/forums/52/topics/383631-method-for-tracking-income-expensesI described my tracking spreadsheet, and there were some other interesting posts as well.

I work full time, but I want to become involved in real estate "on the side" to gain passive cash flow. 

There are many ways that the IRS has deemed appropriate to allocate tax basis between building(depreciable) and land(non-depreciable).One method is that you may want to see the ratio of land/building allocations of recent homes sold in your area.

This method leaves a lot of stress and unknown factors off the table and limits the pool of potential buyers to serious investors instead of dealing with the potential issues of individual buyers looking to buy a owner-occupied unit. 

I am not aware of any jurisdiction that will allow you to do it on your own as you must first start with a survey and grading plan and then the engineer will determine best practical methods for the stormwater.

Getting a notary involved just proves you are who you say you are, it doesn't show ownership though.

But the bottom line is as a investor dealing with a seller without brokerage involve, the best thing you can do is disclose that you are a lic agent and that you are looking to assign the contract your end buyer, investor for a fee. 

But, the loan will come due at the end of the balloon period.Due to the risk involved, the longer the balloon period the higher the interest rate.

I don't want this to get to a legal issue, but given the money involved - it might.

I wish I have more tax experience in real estate but I suppose I'll be gaining more as I invest myself and become more involved in the BP community :) My goal is to acquire 70 rental units in 7 years.