However, after the exchange, they want to transfer from personal name to an LLC under their Holding Company to protect their assets. 

If your friend bails, having the property in an LLC makes transferring shares simpler.

You just can't escape the transfer of (reduced) basis on 1031 or the recapture on sale unless you croak.   

Also, you can always cashout refi them AFTER retirement and get that money tax-free (until you sell or transfer via inheritance).Recommend you read The Millionaire Real Estate Investor, which shares the plans of several different investors.

You said a “little” money, so bear in mind if you transfer that into a self directed account the annual contribution limits are $7k plus $1000 catch up over 50 so it may take a while to get it to a point where you have enough to invest in real estate.  

Could i take any of the left over cashflow and transfer to my personal account and use it to pay the 401k loan back? 

Prices are generally cheaper, there are no caps on rent increases and there are no property transfer taxes.

The best accountants and CPAs will be able to offer you a secure document transfer system in order to keep your sensitive information safe, and also be able to conduct their bookkeeping and tax return services electronically as well, saving both time and money.In my personal ventures into real estate, I have started several LLCs and would be happy to share my real estate experiences with you. 

There are actually 2 chains of title on leasehold properties... one for the leasehold interest (transferred by assignment) and one for the fee (transferred by deed).

Depends on what title was transferred to the buyer.General warranty deed usually warranties for full chain of title.