In return he will place the down payment, closing costs and IO payments during the HML.If the property is initially purchased by one LLC (Ours) and there is an active loan on the property, is it possible to register half of the property under the name of the investor's LLC as part of our model?

Not plus 40k.  40k down payment. 

I like the one that requires payments to be deposited in an escrow account:New York state law requires that consumers receive a written contract for home-improvement work that exceeds $500.

In my developments, I went to everyone I could in the area and got the most RELIABLE (not cheapest) person in order to make my numbers work the best. 

Would you buy 5 houses in Clarksville, which rent for less than your mortgage payment? 

Keeping service quality as a top priority definitely sets you apart as a reliable PML.

Maybe you can use your duplex as collateral seeing as you don’t have a big down payment?

I'm basically looking for input in the following:Option 1: Buy a couple of properties and split the money from the 1031 exchange for the down payments.

S8 will include utilities in the rent payments to the landlord, BUT ONLY UP TO A CERTAIN AMOUNT.

Do you plan to pay all cash with the equity or use it as a down payment?