Your lender is correct—FHA loans can’t be used under an LLC since they’re for individuals purchasing primary residences.

He is correct that you NEVER take the security for last month's rent for that exact reason.

Handle all maintenance in a timely manner (know how much time you have to respond and correct problems)?  

If you decide they're not a good fit, then vacate them and release with new tenants that you actually correctly screen and lease to. 

Correct, however 1% is NOT going to provide you with a good return.

And you are not using the correct terms which is understandable but makes it hard for us to respond.

In fact, the USTC has found in favor of the IRS when a taxpayer did not apply the law correctly (what everyone deems the loophole).

At a bare bones minimum, the letter confirms the start/end dates of the lease, monthly rent, paid-through date, absence of any prepaid rent other than the current month, and security deposit amount.Better, it will include statements there are no unresolved claims or disputes or repair issues with the current landlord, and no verbal or written side agreements.Better yet, it will include a copy of the tenant's lease, and a confirmation the lease is a true and correct copy with no amendments.

Awesome Colin, thats amazing and very encouraging, I am not remotely where  you are in regard to business but I took risk  a in 2013 and went on my own and you are correct, so many doubting, warned, and discouraged me. 

Books are important to maintain because it keeps track of the performance of the partnership not only for one year but over several years.Partners normally have the right to inspect the books.Will the accountant you work with either maintain the books for you or help you make sure its done correctly?