An FHA mortgage contingency gives you some outs and ability to negotiate and even back out of the agreement. 

Any suggestion on how to properly value the entitled land? 

It's a bit of a luxury, but once it is set up properly, it is very easy to track income and expenses.

When underwriting some people would have the first mortgage listed and then a 2nd mortgage...the HELOC..., while others would take both payments add them together and list it as the mortgage. 

Thank you banks will not come to collect, but transferring from personal to LLC typical is a false sense of security from liability as in most instances it is not done properly.

1) Late Fees: we charge 5% of rent, just like banks do on mortgages.

Yes for sure possible upto 80% on a 30 year fixed if rent covers the mortgage . 

If I borrow money from someone directly what is the proper way of doing that?

So you walk away with 25% equity/75% debt split on a property where the mortgage is being paid by a renter and there's a few hundred per month extra for your pocket.You now get to repeat the process again, it is called "rinse and repeat". 

Some factors to consider are how many loans do you have, how many mortgages, do you have bank accounts for each property, and how good are you with receipts.