Personally, I was advised by my attorney that LLC's create a lot of unnecessary paperwork and to get a good umbrella insurance policy instead. 

Now I just created an LLC this year 2018.

.: $850 8% Vacancy Rate (average is 7-8%) 4% Management Expenses 10% Capx/Maintenance (I’d prefer 15% but I’m ok with this giving value add opportunities I've identified) Offer 1 – I want to show the seller what their ideal deal looks like with their asking price and how it doesn’t work with traditional financing that creates negative cashflow for buyer.Purchase Price: $400,000 Down Payment: $80,000 Loan Amount: $320,000 Loan Payment: $2,292 monthly (bank with 6% and 25year amm.)

Once closed you could refinance a portion so that you still create a decent cash flow but can then leverage capital elsewhereCONS - leverage - you could be leveraging your cash into another investment. 

Hopefully subprime returns, remains a niche, but doesn't create financial instability like the last crash.

You would have to split the lot and create new address, which could cost you a lot of money and time.

We would create a promissory note and our names will be on the deed.I came across this checklist: https://www.camaplan.com/resource-center/private-lending-checklist/ to learn about the due diligence I need to take.

Why not create another SMLLC and put rental under it. 

But I'd say to create a new LLC anyway to separate the liability. 

And is the owner giving you a lease rate and purchase price that creates cash-flow and a good deal for you?