If they are doing hourly or salaried work that is not "the practice of real estate", then you're fine.For anything that falls within "the practice of real estate" in your state, you most likely would have to pay their broker/brokerage - so they would need to have a sit down with their broker about how the fees would be allocated between the broker and the agent on the receiving end.In California, the practice of real estate is defined as:"a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others:  (a) Sells or offers to sell, buys or offers to buy, solicits prospective sellers or puchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property or a business opportunity.

We understand that forming an LLC would make things very difficult in obtaining a residential loan.

Go back and download every podcast from episode #1, and listen to those when you're driving around.

Three of his friends were waiting for me in the living room.  

We received a rental inspection registration form from city and we filled it up.

I was under the impression that you had to find a contractor that had some form of registration/ certification in order to work on a home that has a 203(k) loan on it.

Would it be recommended for me to create an entity?

A quick question on entity structure and insurance: As I'm planning on investing in multiple properties over the long-term, I'm considering forming a series LLC in Texas, which has several benefits in terms of administrative cost reduction (relative to having an LLC per property).  

The data is publicly available information, so not sure what they did to manipulate it into it's current form. 

I'm trying my best to cover all my bases, but getting over charged $27K from what I expected has gave me some caution but not enough for me to give up if this property comes back onto the market again.