Tenant's first offer to me is 2 months of rent ( last month, and security). 

I think  a promissory note secured by the property would then transfer title to you and they would have a note secured by the property.

He is willing to sign a 10 year lease at $7,000 per month with a $20,000 security deposit.

There were a small amount of negotiations around securing tenants in the downstairs apartment at the price they identified and cleaning up some odds and ends (asbestos abatement, fire safety items, etc.)

They are moving out at the end of the month and I'm already using their security deposit to make up for unpaid rent.

They use the property to secure the loan and when they give you all the money upfront (but the value of the property is the same when purchased) there is a lot of unnecessary exposure to risk.

Baby Boomers are a massive generation and Social Security helps pay rent for a lot of them, in some ways it's a version of Section 8 housing but obviously with different tenants. 

If not, make sure you get copies of the rental agreements from the landlord and the security deposits. 

This is one way to secure the price and funding for the project by the owner. 

Can I simply transfer money from my personal accounts over to the LLC or is there a more formal/official method of doing this?