I have an inquiry about a 2BR from a family consisting of a woman, her son, boyfriend and mother. I do not want more than 4 in this unit, but would not be surprised at all if more family moved in or they had another c...

I assume I just set it up like a mortgage, with a note payable and pay the liability through cash? 

The limiting factor for our investment is the 6 months reserves required for our current mortgage and the mortgage of the investment property.The lender recommended opening a HELOC for the reserves.

If I don't own the house whether I used my money or someone else's money to buy the house, I am limited to buying it only to wholesale it.

Are there limits on the type or size of the business?

Real contractors don't want to take on something that someone else started, some cite liability reasons.

My partner is funding most of the down payment and closing costs as a limited partner.

The limits are determined by state law.If an IRA owns an asset such as real property, a tenant sues, then they are suing the IRA. 

I really want to do the right thing as I am purchasing this home for investment purpose and will like to put this in an LLC to separate it from my personal assets and be cover from a liability stand point, but can't really afford the 20 – 25% down payment.

The loan limit was one of the reasons I was wondering if an LLC would be a better fit.