Reporting the proceeds you pay to seller on a 1099 sounds reasonable.

I agree that diversifying the proceeds is the best strategy.

So, there is even more risk.The things that you can do, include being properly capitalized, not be greedy, (in whichever way that may be defined in the county you are buying), know solicitation laws, know Dodd-Frank, the Consumer Protection Act, the S.A.F.E.

Some of the red tagged items proceeded my ownership.

Additionally, the borrower no longer has any income coming from the subject property during these proceedings.  

Instructing or deliberately causing a borrower to sign business-purpose loan documents when you know the money will be used for consumer purposes has always carried civil liabilities.

They make their money off of real estate agents, but real estate agents are the worst people to make money off because they are highly unreliable and in and out of the business when the market changes.Their target should be the consumer with higher levels that they can subscribe too for data, since Zillow is linked to the MLS now which makes their data somewhere more reliable.

For a few thousand dollars in rent, it is worth the call.If you don't get satisfaction there, credit card companies are regulated via The Consumer Financial Protection Bureau (CFPB).

I’ve bought some houses with 0% interest for a year credit cards and a few with consumer lines of credit from banks.

Never pay an upfront fee.You didn’t mention your state but understand that with little exception, an NMLS registration is only required for consumer-purpose loans.