I started my own company 6 years and 3 months ago. There was a ton of heart-ache and the first 3.5 years in business I worked 80 hours a week MINIMUM. I went MONTHS without taking a day off. My average weekday (mon-sat) started between 7:30am-8:00am and went to at least 9:00pm and many nights until 10:30pm. Sunday was 9:00am-5:00pm to clean the building and make sure that everything that I didn't get done during the week was done by the end of the week. Not only did I have to run the business but to help make it profitable I had to do everything - even down to scrubbing the toilets. Had I not had the moxy to put in those hours and do all the work I did the business would not have been successful. I had to step back from my life - family, friends, hobies & most activities. Today I'm up to over 60 employees and have a pretty successful business to show for it. It wasn't easy by any stretch, but damn does it feel good now that things are working. Starting a business can be the greatest joy you could imagine (other than becoming a father 3 times the business is almost like a 4th child).
While I did my business as a sub-chapter "s" corp, I agree with what the others have said about opening the business as an LLC. If you're re-habbing houses you're going to want the protection the LLC provides if you have any assets what-so-ever.
For the initial start of the business, there are a lot of places out there that offer "offices" for rent. Some places call them business incubators. Instead of signing a long term lease you can rent out a 10x10 office space for a few hundy a month which gives you a commercial property space to help qualify for insurance and makes a more professional presentation for anybody that wants to meet you at your office. The office space will also generally give you a receptionist, switchboard capability so that a live person answers your office phone, gets your mail, greets your guests, etc. This person is shared among all the offices and comes with the price of renting the 10x10 office area (or what-ever size you decide you need).
You seem to have your first customer setup, but how much do you really know about this guy? Is he asking you to use your cash to rehab the properties and he'll pay you back for expenses plus your time/effort? Just watch how much cash you sink into each of those properties before getting the money back from the owner. I have no idea who this guy is or the relationship you have with him, but as has been seen on many a show on a&e and the other networks that followed the "flip my house" craze, you may start to work on one area which leads you to a major problem elsewhere and the owner of the property may not be willing to pay you for all you've put in - which could amount to thousands of dollars.
Best bet is to have him pay for the material expenses - not you. This way if you get stiffed it's only for your time and you don't have to worry about fronting money on his properties and not getting it back.
After this first customer, who else will you work for? How expensive is it to acquire a new customer and is it worth it, or are you better off exposing yourself to the risk of acquiring the homes, repair then flip (or rent out) yourself?
Final thought here ~ Whatever amount you thought you would need for start-up cash, well, triple it. You'll find there are tons of hands that reach out looking for money from you.
