When I run the numbers based on these rents, the property operates at a negative cash flow.If I increase the studio's rent to $1,400 per month, the property becomes cash-flow positive.

The investors must be provided a Private Placement Memorandum, subscription agreement, and operating agreement.  

Verify with the city.Personally it makes no sense that an LLC would be able to operate without being onsite when it is required.The only thing that sticks out is the grandfathered in statement.

It has been operating for 2 months now.

@Sean Doyle - Toledo is the only city I operate in.

If you decide to operate one outside of their desired areas, they will come after you with hefty fines.

Every PM operates differently, and at the end of the day, there is tons of information you can navigate on your own in the beginning stages online, but surely there will be PM's that would be more than happy to assist you on journey. 

Operating your rental like a business is mandatory to protect you, your ROI, and your property.Hope this helps...

If your entity has several years of operating history and good and reliable financials, you may be able to find something. 

Most lenders will vary how aggressive they will get based on the experience of the operator (you), but I don't know any that will lender to someone who's never done a spec build like you're contemplating.