The facts that she was late twice and didn't even attempt to make a partial payment or talk to you says it all. 

The tone of his email implied he had been unable to reach my PM after "several attempts."

If the unit does not comply with local codes (like proper egress, zoning approvals, safety standards, etc), it cannot be legally rented regardless of how it’s marketed.The safest course of action forward, would be to bring the unit up to compliance with chicago's zoning/ building codes before attempting to rent or advertise it. 

Attempting to collect from someone who has no incentive to pay will drastically lower your chances to actually get the agreed upon money. 

I’m a bit of a nerd with an analytical streak, attempting to break out of my shell and be more social—so if you see me in real life, get ready for a nerd trying to be outgoing!

Neither I nor others have any idea what has happened to the money, and despite numerous attempts to reach out, there has been no response from him.

Investing as a limited partner/ passive investor is a somewhat risky endeavor whether it in private placement or in the public markets.  

Really no reason to attempt to do this with an LLC.

While all the posts have at lease some legitimate points, I personally believe camp 1 is missing the opportunities present to protect assets under US law mostly because they don’t either understand asset protection, or don’t want to bother with it, so rather than do a proper evaluation they dismiss it as something that won’t work to justify their unwillingness to entertain the idea.Camp 2 is deluding themselves - which delusion has been enhanced by charlatans writing books, giving seminars, and selling packaged plans all of which either attempt to hide your assets or hide the ownership of your assets.  

I recently attempted this with an FHA loan for a client, but it was unsuccessful.