I know a cash buy would be optimal, but a loan was the only way I could get started.

If it works out then you have negotiated optimal terms.

Are you trying to find an optimal sell period?

It sounds like she hasn't been at all aggressive about optimizing revenue though, since the rents are that much below market.

I recognize your purchase timing was not optimal and in I had purchase 2007 I would not have the same type of gain.  

As you are testing, you optimize the campaign until it is profitable.

Then, once you gain skills necessary and understanding of how properties should be managed to optimize return, then you decide the best way to scale your business and reach your investment goals.

A day with excel forecasting, projecting, and running analysis to optimize a deal are my favorite days. 

Another option is to use a home style renovation loan which does accommodate primary residences 1-4 unit, second homes 1 unit only, and investment/non owner properties as well (1 unit only).The LTV's are similar to regular conventional financing from 75-95% LTV with the lower being investment and the higher being primary residences.The benefit is you can combine your purchase money loan and your rehab cost into one loan upon purchase and your rate is 5.00% or less as of current rates while with hard money you may be in the double digits with multiple points.The downside being that you may need more time to close, these renovation loans typically take 40-60 days to close.Your original question basically strikes at a balance of asset protection (LLC hysteria/hype) versus financing optimization (best rate/terms/etc).

I've spent the last few weeks analyzing the VA Beach market and have found that my decision to pursue being a landlord and renting multi-family units seems to be an optimal choice for that market.