The owner was motivated due to personal circumstances and wanted to avoid the hassle of listing the property publicly.

It could be helpful to you (lenders will want to see lease agreements) and it is good for the family member (they actually could do a program where them paying rent increases credit). 

It's how it feels, to the public.]

No tax so far I think.2) If I convert that partnership interest into shares in a PUBLICLY traded UPREIT I trigger tax on the deemed sale/exchange of the partnership interest into stock of the REIT?

Most institutional DSCR lenders prefer one lease per property/unit, however, I've seen programs allowing rent by room strategies.

There are auctions, city grants, and financing programs designed to help people revitalize neighborhoods.

I enjoy teaching BP members how to use the system to save more money by using programs and taking advantage of loopholes.

Investor pays $2K program fee and 25% of the note acquisition price (they finance the remaining 75% via a participation agreement - at 12%).

It is extremely hard to find programs for 0 experience simply on the 1-4 unit side of ground up construction. 

A lawsuit on public record against them could put some serious harm in their future endeavors especially if they have a track record of bad deals.Note: I am not commenting on the experience of either party noted above and responding in a fashion that this information could be used for fill in the blank company.