However, since you put the asset into an LLC, I am going assume you care about asset protection and further this discussion just a bit.My advice to you is to seek out local banks where much of their business is derived from commercial lending.

We go above and beyond when it comes to protection.. starting with insurance coverage, sings in the listing and in the property that there is no guard on duty (as silly as that sounds), putting extra locking device high enough so youngsters can't reach, an alarm/beep system to alert them that door opens for those with small children (or elderly) so they cannot wander out in the backyard with no one noticing and risk drowning.

Ensure you understand local regulations regarding permits; it’s usually a good idea for your associates to form an LLC for liability protection, but individuals can do renovations as long as they pull the necessary permits.

Figure out ways to enforce rules to protect yourself and the other renters.

Now, I see you are in Seattle, which much like Portland, has extensive tenant protections.

It seems like I need to check further away from the DMV area.My feelings are if you want “cash flow” you should buy a bond (I really like the tips rate right now) there is next to no reason to buy real estate for cash flow, if you are going to buy you should buy with appreciation in mind, which is not to say that’s the route I’d go, I’ve been liquidating properties to put in stocks and money market funds over the last few years and u just did the math and I’ve come out well ahead, but just to say there are arguments for stocks/bonds, there are arguments for levered appreciation, but the cap rates pretty much anywhere aren’t worth it vs an inflation protected bond, especially since a 3/rd of inflation is real estate anywhere, you could get “cash flow” and inflation protection much easier through a tips.

To simplify the existing lease I thought about asking the tenant if they would be ok modifying the addendums to get rid of the resident benefit package and the building protection plan. 

Holding properties in an LLC (or other legal entity) can offer valuable protection for your personal assets, so I understand why you went that route.

While an LLC offers liability protection, it does not change how taxes are reported unless treated as a partnership or corporation.

How do I protect myself in this situation, while also helping a relative?