Here are two things to consider:San Diego historically has outstanding appreciation. 

After the inspection and once it is rented, return any outstanding money. 

From PM company:1) Existing leases and any related paperwork2) Keys/lock box codes (I already had my own for them to use - they just changed the codes)3) Outstanding maintenance requests/work ordersFor tenants:1) Inform tenants of the new management details2) Maybe establish a 2nd telephone number (Google voice perhaps?)

@Alex S. form looking into both options HEL and HELOC seems like on an investment property they will approve up to 70% of the loan value less any outstanding mortgages, so don't feel obligated to pay the house off 1st. 

The business itself is a physical business on some land so we would have a nice asset once we finish building everything out.The issue that we're running into is that he is concerned if the business were to fail that the bank would come to him to try to collect any outstanding debts since his net worth is so much higher.I'm trying to figure out a way to structure this so that if we were to fail the risk of the bank coming after personal assets is evenly spread out amongst all three owners.Any guidance would be really appreciated.

For example, find out if there are any outstanding issues or concerns about their homes or any repairs or actions needed.Upon closing, (re)engage with each and start getting them moved over to your system, your lease, your way of collecting rent, your way of reporting maintenance needs, etc...

He was outstanding in helping me purchasing and selling the property!

That's for one state, now think about all the other potential issues and one person teaching that nationwide?   

What are the license requirements to be a debt or equity broker for multifamily deals nationwide?

You can keep 1031ing into new properties and deferring taxes, but when he sells it via regular sale to you, then he must pay the outstanding taxes due on those prior gains.