Mainly, you'll want to let the potential partner how much of the contract deposit you'll be contributing.

Using my own funds to deposit to the LLC (Is this step necessary?)

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.

I would expect to be getting their $1k deposit at closing to offset damages which leaves $5k.

All legal rights pursuant to the Rental Agreement, including return of any Damage or Security Deposit(s) are assigned to the Incoming Resident and remaining residents.

Opened another checking/credit card for just real estate expenses, and deposit tenant and our portion of payments into that account.

hopefully you still have their deposit to offset some of the costs. 

He had collected a $5000 deposit from them, and also was collecting more from them on a monthly basis that what we had originally been renting it for and pocketing the difference.

one does not have to risk EM and or big deposit until they get to do a HOme insprection and CO has been issued.. is that correct..