What recommendations would have to improve our agreement structure to account for the risk?

So I was happy he provided me with an opportunity to buy the property without him going to a list of an internal list of preferred buyers which would have counted against me as a first time investor.I signed the purchase agreement then ordered an inspection report so I could perform extra due diligence as an investor.

I'd imagine all of these questions (like what would happen in an instance when one individual would like to sell) would be spelled out in some sort of operating agreement before purchasing any property.

In these situations, we generally give them the option to sign a month-to-month agreement with a huge increase or have them sign a lease for the whole year.

Without a clear agreement, there is a strong risk of things going south, particularly when you mix family dynamics.

@Evan BellDid legal zoom prepare your operating agreement as well.  

(Rent Zestimate®: $1,599 and I am collecting $600/month) Can this be considered a "Not Rented for Profit" rental property/agreement?

If you both qualify for traditional financing you could do an operating agreement/joint venture agreement and open joint accounts in a similar fashion.

Hey @Errol Kelly, The clause that ensures you get paid at closing should be in your assignment agreement. 

I want to set up an LLC to sign an agreement with the future tenant.