It eats into cash flow, we may have difficulty saving for our next down payment,, and I am worried that the large mortgage will affect our debt to income ratio when we apply for a loan for our next property.I am also concerned about paying too much for the property as there are no solid comps in the area. 

Between buying the property below market value, forcing the appreciation via rehab, and having a solid cashflow strategy, this sounds like a Killer Deal.

You still have several options, depending on if you want to invest directly in individual properties or be a bit more removed:Full-service turnkey investment: Should be mostly passive after you do your due diligence and pick a provider, but don't skimp on your homeworkYou choose which props to purchase, but have no control over tenanting choices, some say in large maintenance expensesAvg cost for solid B/B+ prop in Birmingham (and some other markets but this is the one I have data for, since it's my market) is about $100k per door; you'll pay market price for a tenant-ready, fully rehabbed propertyPartnering with someone who does the on-the-ground stuff while you provide capitalCan be passive if your partner really knows their stuff, but more likely you'd be fairly involved with the choices madeMore control since you call the shots with your partnerYou can pick which markets and price points you're interested inPotential for higher returns (ie buying distressed and then forcing equity through renovation) if your partner is experienced and can execute consistentlyInvesting in a syndicateMany investors pool funds to invest in much bigger projects like commercial space or large MFRs, or in larger portfoliosVery passive, investors are not responsible for project vetting or management, but you have no controlMay have higher bar for entry, some syndicates require large investments and you'll need to have liquid cash on handBuying shares in a REITLike an ETF but comprised of real estate investmentsVery passive, but no control over which assets are held in the fundHighly liquid, easy to buy and trade, lower bar for entryEverything is a trade-off between passivity and control, time and money.

I would love a solid recommendation of the lawyer who can help us do a simple transaction of transferring our property into an LLC.

Luckily I don't think we are any major crisis, better yet I think we are on track for a solid year especially in Denver!

While you may feel stuck, it sounds like you and your wife have done a great job laying a solid foundation to build upon.

I have 2 entities that focus on real estate investments, but have yet to find a solid answer on whether I need a business license in this area.

The rental numbers look solid and the area will appreciate well.I am naturally quite bullish with investing, however I am new to property and not considered a new development before I came across this deal. 

I know you said run but if this issue proves to be a non issue, this is a solid double or triple in the deal category 

Investing from a solid financial foundation will increase your chances of success dramatically.