To the extent points are being captured in the Cap Rate you're actually skewing the cap rate with your leverage, which kind of defeats the purpose of that metric.Since the goal of Cap Rate is to provide a quick and dirty view of the risk/reward of a property.

Our dream situation is to:- Have a place to call our own whenever we want to be there (ie...cannot have a long term renter in the property because it defeats the purpose). 

Education is probably the key.Going forward knowing the answers to her concerns - and the ones she hasn't thought of yet - will go a long way toward understanding what REI is and what it isn't.Fear defeats everyone who lacks the knowledge to overcome their fears.Right now, of course, she's right: going into REI uneducated is an unwarranted gamble.

While not required to be done by a listing agent, I think it is negligent, and self defeating, for them not do this themselves before listing a property.

That seems to defeat part of the purpose of the LLC. 

Additionally having $160K in dead equity you are going to be paying $2 for every $1 of cash flow which will defeat the purpose of owning a income property. 

If my name is on the mortgage and I'm making the payments and receiving the statements, etc. it seems that would seriously compromise my liability protection and defeat the whold purpose of transfering the deeds.

I could have each partner be responsible for getting financing, but that seems messy and defeats the purpose of just having investors contribute to the LLC.

Dwaine,I think its great that you are putting the property into a trust, however, the fact that you are naming your own company a trustee defeats the purpose of putting into the trust.

We would be able to get the loan in the name of an LLC, but they would make us sign personal garauntees (defeating the purpose of an LLC?)