Unless you are obtaining a DSCR (Debt Service Coverage Ratio) loan or working with a community lender through a portfolio loan, you will likely need to take title to residential real estate in your own name at the time of purchase.

They also didn’t like the idea that Phase 2 investors would dilute their position when they come in later.What are some fair and effective ways to address this concern?

@Randy Fitzgibbons - I'd recommend going with contractors who have experience with deals like this AND have experience working with banks/lenders for 203K rehab deals.

It's very likely they saw the inside condition of the unit before you purchased it and they have the right to inspect.

Like you, I have family there. 

For financing, there are programs like FHA loans for first-time buyers, and there may be local or state-level programs offering incentives for affordable housing investments.

I furnish about 80% of my properties off of facebook market place and places like that. 

Hey Andrew: The Freddie Mac Small Balance Loan (SBL) and Fannie Mae Small Loan multifamily programs could be a good fit for a project like this.

Looking forward to networking and connecting with like-minded investors.

Most seem to like there to be a business reason for the state you use to create the LLC, either the property is there or you live there.