This is located half mile away from a house I own (my mother lives in it) as well as my first rental so this would be my third purchase within the area.

He may just do it for half the price if you ask him that compared to the other two bids.Win, win.

How do I make them see that this money is half theirs, half ours, and not the LLC's money and that we should use equity to pay for the improvements? 

Since then we have had several conversations and a year and a half later our property is still registered with the City under the name of the prior owner. 

Half of CA is moving here it seems.

We are paying 25% at start, another 25% at half way, and 50% after completion and final walk through.

Materials can easily be more than half of your overall rehab costs.  

I already got my first owner occupied loan and used up half of my savings in doing so. my partner  has about $200K but reported losses last year.

The market is extremely hot right now but interest rates are awesome.... so you might be over paying on property but a percent to a point and a half on a 30 year mortgage could save you even more when it comes to a low monthly = more cash flow.

I am an agent here in the Seattle area, and I have 17 transactions in the first half of the year.