I am mainly interested in passive income and do not plan on being a full time investor as I have a full time job that I plan on keeping, at least for the foreseeable future. 

These large professional sponsors have mature deal flow pipelines; so, it has been an intentional strategy to generate deal flow for me in a market where others are having a tough time finding properties that meet their criteria.It was a lot of work leading up to this stage, even vetting the passive syndication strategy.

Yes, it's gotten better, but mainly because the surrounding areas that have done a good job of trying to accomodate the massive growth in the region have gotten so expensive.

I’m mainly in digital marketing so my answer will be geared towards that.

My goal is to be able to buy single as well as multifamily homes and live off of the rent (long term goal) Ive also met with a broker who works with short sales, he takes on about 10 "projects" a year presents you with the short sales in area of interests (mainly Long Island) along with high and low comps, he asks for a percentage (unknown, at our discretion it appears) of the  profit after the property is sold, he typically works with investors who buy and flip. 

Their main goal of setting it under the LLC. is to provide legal protection in the case of a lawsuit (at least for their purposes) as well as for tax purposes.Hope this answered your questions!

Would using a 401k with the intention of paying it back after potentially renovating and refinancing be a good idea?

With that said, the original intent of the post was to determine if anything shady was going on.

I am in the process of closing on a primary residence through conventional financing.I have a unsecured line of credit, that i occasionally move money into my main checking account, when I pay contractors for work on rentals etc. 

There is a gap around the main drain exit and this area is completely under water.