Plus we intend to use the project for educational purposes for the children in our family.

Honestly, what's the purpose of your post? 

Low down payment loans are to promote home ownership and less risky since a homeowner won’t walk away from a house as readily as an investor. 

I doubt you understand the purpose of that considering the flack you guys are giving me over it.

If you didn't use the proceeds for business or investment purposes and used it per personal expenses, you cannot deduct.  

This entire discussion is really walking the line of self promotion, which is not allowed on BP.

Option b or just save it for some other purpose. 

I bought a Tri-plex for that exact purpose earlier this year.

I did plan to quit claim these properties into my LLC for asset protection purposes, but I don’t think this helps with the credit score unless the mortgages are in the name of the LLC .

If you take the time to gain clarity on those items, you should get a pretty good handle on what your experience is going to be like.The purpose of investing passively is to leverage the sponsor's time, expertise, and ability to source great deals, but if the experience is going to cause you to lose sleep at night, any return you might make simply will not be worth it.All the best,Jack