He had none of his own and he was medically vulnerable, so we provided this for him. 3.

Being that I am a beginner, I know how vulnerable I am to making mistakes and underestimating/overestimating.

Your best bet would be to start calling local banks and credit unions and find some that will do this loan in your area.An ARM leaves you vulnerable to future rate hikes that may hurt your cash flow. 

I do not know California law but it is unlikely that it was illegal to take the loan from your family member;  however, you left your family member in a very vulnerable position.

I feel as if this could be a low risk opportunity to get my feet wet in the business without putting myself in such financial vulnerability.

I'm sure many agents will be inflamed but I'm just curious if this is true.

Clearly defrauding someone would be out of the scope of this thread, as we are talking about people running real business without the intent to defraud people, which is the main avenue to pierce a vail in the court systems today.The most common factors that courts consider in determining whether to pierce the corporate veil are:whether the corporation or LLC engaged in fraudulent behaviorwhether the corporation or LLC failed to follow corporate formalitieswhether the corporation or LLC was inadequately capitalized (if the corporation never had enough funds to operate, it was not really a separate entity that could stand on its own), andwhether one person or a small group of closely related people were in complete control of the corporation or LLC.Some corporations and LLCs are especially vulnerable when these factors are considered, simply because of their size and business practices.

Perhaps a solution to solve the concern about the landlord’s vulnerability is for him/her to do business as an LLC.  

I turn on the Greek news regularly and see places that I know well going up in flames, desperate rioters throwing Molotov cocktails at the police, EU and Greek officials routinely making surreal pronouncements and projections about the economy for one politically-expedient reason or another that has no basis in fact.Bad things happen.

His rationale in requiring more security is that the value of a storage facility is so heavily based on income and banks are known to run them into the ground during and after foreclosure so his second position would become vulnerable--not that either of us actually anticipate a foreclosure.