Of course anything non-tradtional but safe in googles eyes! 

If I was local to it and could verify things frequently with my own eyes I'd consider an arrangement like that. 

I am keeping an eye out for buy and hold deals but know that rents vary wildly depending on where you are in town.

Should have gotten a second opinion and set of eyes on the unit before I bought. 

Especially since it sounds like you have a good track record with this guy I would give him a little bit to deal with his situation and circle back with him on the rental. 

My plan is to show the income and pay the taxes for another year or two, buy a couple more properties, THEN circle the wagons, reduce taxes where possible, quit my soul-killing cubicle job, and do this part time.

You would need a great and responsible cleaning person/s, a local handyman repair service ect.Your cleaning person would be your eyes and ears.You can manage payments communications, calendars etc through the VRBO / airbnb platform.A Lock box or smart door lock would eliminate the need for someone to handout a key during check in.

Can I get other eyes on the numbers for this deal?

To come fill circle, if you have assets then setup the LLC if not - then you can go either way

I am one that believe in my saying which goes - "If you hang around a circle of 11 CEOs, You'll be the 12th" .