But all of these investments operate under highly regulated and constrained exemptions to securities law, and I have been told it is very difficult to do the above legally.

4) Legal Options: who told you that you can't sue the LLC owner?

I would suggest to check with your local laws first.Most likely you will need permit ( I guess you can get away without, obviously not suggesting that :D)) but possible) , also check your zoning.If not possible to create separate unit legally, I suggest not putting an oven in the basement, and rent it without, or live in it yourself

You want to get her out as soon as you can with whatever legal means necessary or it will never end and everyone else will move out.

I dont want to deal with legal issues down the road.

I am paying for all treatments, but they are asking for rent reductions etc. after legal advice from a connection they have that has been giving them legal advice. 

Specifically, we'd like to understand:Liability Protection: How does each state's legal framework and case law compare in protecting our personal assets from liabilities related to the property?

@Jerry ZhangYou cannotYou can give a personal guarantee but then you would have to have other assets.What could happen and we have seen many times is they go into default and the 20% equity cushion goes out the window due to late fees, accrued interest and legal costs.

Construction skills, loan skills, financing skills, legal understanding, real estate transaction skills, etc all greatly help.Personally I wouldn't deal with someone that has no money, lacks experience, or some kind of resources. 

@Bryn Chatterton screening applicants will be SUPER important.This is a copy-paste from our website, so ignore some of the specifics.Robust Tenant ScreeningA bad tenant can lead to thousands of dollars of losses via unpaid rents, legal fees and property damages.