Will I be able to even get my feet wet in this field at all under my circumstances?

Just two partners with two different circumstances in life.

I understand when purchasing/titling properties and therefore holding or selling properties, in the name of your LLC, you create and operate a separate and distinct entity. 

If on the current home, an owner occupied loan was taken out less than 1 year ago, technically they would need to get approval of the lender to make it a rental due to unforeseen circumstances?

I spent time on the phone with the CA FTB and Employment Development Department, and am still struggling to find the right way forward with our complex circumstances. 

It makes sense what you're saying about renting this one out and living somewhere else for awhile, but due to my current circumstances it is something I cannot do. 

It might be worth a quick check with an attorney to understand your liability and your obligations.I don't pretend to know anything about it, but having stolen goods installed, especially if you have personal knowledge of the circumstances can't be a good thing to be involved with.

If he can't pay rent, he should move out REGARDLESS OF THE CIRCUMSTANCES.

Also, no impact to your credit should you be the unfortunate victim of circumstance and be forced to default.   

Some places are sensitive to fluctuations due to local circumstances.