I guess I am curious about adding this to the toolkit when wholesaling a property...does this contribute to the sellers honesty at all...just to formally disclose rather than ask over the phone or even at the kitchen table.

In Oklahoma, eviction is a judicial process.

Have the "good" tenant send you formal written complains of the "bad" neighbor if they are harassing your good tenants.

That may be a good step to take if you do not have one while formalizing your plans. 

Will setting up a business entity deter a formal bank from lending to me?  

The bank can send the seller a 1099 or file a judgment for the difference..The sentence starting with strictly speaking... is not literally accurate.If the lender has agreed the short sale they will have formally accepted receiving less than they are owned.

The only formal demand to buy real estate in Brazil for foreigners is the acquiring of the CPF number (Taxes Holder number).

If you send out enough of these letters I guarantee you'll get a realtor calling you with a seller agreeing to carry a second and wanting to write up a formal offer.

You should have your family member make the loan formally.

If you want to try to formalize this, apply project management principles.