How much money do you have for a down payment for a new rental and how much can you borrow? 

Of course you can never have control of the money and you must have your QI in parcel before your sale completes. . 

The other investor may be bleeding money and they don't even know it.

Joint ventures entail utilizing your own money to buy properties with others.

@Yooni Choi managing from out of state (OOS) with ZERO previous landlord experience - probably won't go well.You WILL make a lot of mistakes that will cost you money.

We do have to come up with 40-60% of the LTV through investor money!

The only thing we can think of is he deals with a lot of international trade and money and maybe it’s OFAC we just get a scripted message every time we talk to someone so we got lawyers involved. 

If I were the neighbor, it sounds like I'd be the only one bringing money to the table so you could get something you want.

If so, they can sell within 2 years and not pay capital gains taxes on the sell of the home.They could take that money and buy multiple rental homes in other areas if they wanted, or use the money to downsize in to a different home while still having money left over.

That likely means that they are not good with money management which you are likely expecting from him.To answer your question, if you are doing long-term rentals, the LLC taxed as a partnership is likely the go to route.Best of luck.