I'm guessing the management company would collect all rents, pay expenses etc and the individual LLC would just own the real estate.

Yes taxes will be usually be higher for a non owner occupied.Insurance will definately be higher.

I have a 52 unit townhome development in Surprise, AZ that we've developed the land and looking to either sell or partner with a builder.Be sure that this property falls under the criteria needed to actualize the tax benefits. 

So many things are changing in the Insurance Industry, its something to really pay attention to.

I want to pay them a preferred rate of return on their money without giving up equity in the deal. 

Property taxes and insurance run $8,400/year?

Our largest issue (and I understand how fortunate we are so not complaining...too much), is the enormous amount of taxes we pay.

You can offset this with points.When the lenders provides you with an estimate of the loan along with all the charges pay specific attention to:Origination fee - This is whereLoan Points - Sometimes they force you to buy a point and they bring down your rate in returnapplication feeunderwritting feeBasically you want to compare how much you are paying in all of these and what interest rate they are giving you based on this costs.

-should i just bite the bullet and pay for the new HVAC systems?

I am paying for that now.I will also do all of the other due diligence prior to investing - experience of the operator, referrals from those in my Community and network who have invested with the operator, responsiveness and other factors - but proof of effective communication will remain a priority for me.