Reaching out to the community to make sure I'm not off base here to immediately think to decline this offer.  

Banks never allow residential mortgage affordability to be based on the income of the property itself

I am a little weary since I haven't done that before- not sure it would be enough to get me into buying portfolios or larger complexes though.. 

High property prices mean fewer people can afford to buy, so more people rent.

As we grow we want to make sure we have the infrastructure to keep growing.

Not sure if they do Colorado.

Also, I have heard about the benefits of having an LLC set up to manage rental properties but not sure if this is advisable at my stage (e.g., not a lot of properties to manage).

I am not sure, but I imagine that you could also help out and lend your credit to this type of purchase. 

Retain proof of that notice and make sure you include the new tenants right forms required by the city now.

For your 1st time, pay a Property/Land/Transaction Attorney to review the title commitment with you to make sure that there are only the outstanding liens on the property, and that the owner has title.- Collect Tax Certificate to verify Property Taxes are Paid- Get a current statement from the seller to verify the existing balance, if they are delinquent, you can get the bank on the phone to verify the amount to make the loan current.- Review the loan documents, there is most likely a due on sale clause, which is why you won't find a title company to process these for you.