We do offer bank statement HELOCs for business owners who don't show income on paper but can show revenue coming in(bank statements), doesn't sound like that applies here.Freddie Mac allows for assets to be counted as income, 70% of total divided by 240.

The only guarantee in the Rental Business is to get First, Last and Full Security Deposit.

and how do I go about dealing with this.Unfortunately this is business, some people suck.

Is it as simple as setting up an llc on zen business or should I hire an attorney? 

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

Good business relationship?

@Julio Arias PabonBanks are very difficult now to get a HELOC on investment propertyI would call around to local banks but most have completely got rid of that line of business

Always be in control  (not controlling, there is a difference) in your business and how you do things. 

Good Luck, lending private money can be pretty convoluted and expensive, feel free to reach out to me directly too if you think I can help. 

Oh, jazzy business?