Until you have experience in partnering with others on successful projects, I highly recommend working with your partner and an attorney to structure an appropriate, legal, and viable operating agreement, be it in context of an LLC or otherwise. 

Your experiences and insights can be invaluable in helping me make an informed decision.Please feel free to share your thoughts, experiences, or any relevant information.

@Lucas Schlund there are logically, 3 options:1) Buy Cash: PROS: You can get better prices on houses because you can close faster with motivated sellers and buy houses that need repairs to qualify for a mortgage (less buyer competition)CONS: takes the longest to save the funds2) Use Rehab Loan:PROS: Same as #1CONS: more expensive loans:---FHA 203(k): not that expensive, but must live in the property for 12 months before renting---DSR Rehab loan: relatively expensive and may need experience to qualify3) Mortgage on Property with Cosmetic Repairs:PROS: easiest & cheapest to doCONS: lots of competition, so can be hard to find a "deal"PM us if you'd like to discuss these in more detail.

No real movement in the budget to raise the ceiling so I was wondering if anyone on here has had experience with selling these lower ceiling height homes??

If you are using a property manager, the burden - and much of the liability - usually falls upon them.  

Has anyone had experience with this lender?

Estimating repairs is the hardest part and seems to only come from wisdom/experience.

I had a similar experience where a contractor stated they were licensed but they wanted to avoid pulling permits as it took too long.

@Aaron Davis My personal experience is that non section 8 tenants don't play well with section 8 tenants.Frank

From your experience do you think this market is gaining strength lately?