So, what instrument/document is causing this issue? 

Any instrument can be used.

It is certainly possible to find a lender to give a credit line, however, I would say that in most cases, it would not and should not go unsecured, thus, a deed of trust or similar security instrument should be required and used.

In most states a DEED, is a TRANSFER INSTRUMENT, not "proof of ownership" like on a car.

decide if you really really want to be a landlord for the rest of your life.or if you would like to look at other financial instruments that will return as much with much less work.or buy a business that makes any of the standard investments pale .. if your going to put time and energy into something maybe owning a cool little business that makes you 100k or more a year would be fun and profitable.

Next, the putting together investors for funding" aspect is highly regulated by the SEC, that can easily be viewed as a security instrument and a violation of law.

Your findings that you discover from your research will be instrumental in you starting out in investing. 

In the same vein you can't exchange real property with other financial instruments such as stocks or bonds. 

Is the land contract always the preferred instrument for the seller?

At what point does an LLC or other instrument get formed?