I would also encourage you and others to post questions to stimulate conversation here.

For LPs, it’s trusting the GP can manage the process (cost) effectively through the rehabilitation to the sell. 

Essentially, they do the work that you would be doing as the owner and landlord of a rental property, just on a massive scale.The limited partners (LPs) are the passive investors (others like you), who invest their money into the deal.

Both the LP and the GP enjoy profit sharing and the LPs benefit because they get paid first and the GP only makes a profit if the LP clears their hurdle.

Also, it can be a better fit for those who are seeking to be passive LPs rather than an active property owner. 

So, most of the LPs investing for the first time tend to be conservative, unless they are someone from GP's network or they are repeat investors.

to get quick initial cash on cash while I am checking out the listing and then if I like it I do detailed analysis with excel if I have to send it to my LPs.

GPs and LPs own an actual % of the property(ies) they invest in as proven by the K-1 tax statement they file with their tax returns every year. 

Also, finding good deals in a timely fashion is a challenge these days.I would think the operating agreement of the LLC would make it difficult for the GP to effect a 1031 exchange unless he effectively bought out the LPs, removing them from the entity.

Why not bring in additional LPs to reduce each LP's ownership percentage?