If you are looking to raise a small amount from a close-knit group, as @Jacob Blackett said, you could probably do a direct LLC. 

I don't want to be the knit picky type of LL that tries to nickle & dime people but I am trying to find that balance that is general wear and tear and what is excessive wear and tear and should be taken out of the tenants deposit.

I have a pretty big doubt it's "City rules" and more of "Our tight knit clicky group who are on a power trip and want to cry if everyone isn't a perfect little stepford wife rules"Talk your son out of becoming a useless waste of space when he grows up :) Write your wife a lease tonight allowing her to reside on the property and have her take it to the pool tomorrow!!

They were very knit picky and it cost me a lot of $ to get it to pass.

They are a tight knit community committed to each other and accepting of all newbies to support them and help them succeed.It almost seems like this post is blowing off steam at people who want to change their life for the better, but don't know how and they are being ridiculed for it instead of being encouraged to succeed.

You mention that it's a close knit town.

I have found this to be true when too many are in the same close knit area.

Those of us in the construction trade are pretty close knit and we try to help each other, even though we may be competing for the same work.

This is a really tight-knit community who honestly want to help each other succeed.

She wants to keep it close knit for now.