It is a one page contract that is pretty cut and dry.There's a reason the standard contracts are multiple, legal-sized pages with small type. 

So I got the package of rental forms from WI Legal something or other, and on the initial agreement (M-M) I only required tenants to pay for "water"; not fully realizing that the Milwaukee water bill also has "sewer" and "muni" charges - which are far more than "water". 

So I'm not sure if the laws are different in CO, but I know here in CA you can purchase a backcountry cabin on Forest Service Land, but it is NOT LEGAL to rent it out, nightly or otherwise.

You can form the LLC via your state's government website and pay the applicable fees listed.When you apply for an EIN with IRS, you can to choose what type of legal structure, business, or type of organization is being established.

If I was doing it (this is NOT legal advice) I would write it in on the PA that proceeds from the sale would be split between the owner 72% and lesee 27% and that owner gives title company permission to disbursethe lesee's proceeds directly at closing. 

There are also many experienced BP community people to help you establish the legal entity.

Doesn't seem like a business venture I should undertake without forming an entity for the legality of it all.    

First always seek legal counsel with an attorney:ask them the pros & cons of some of the following:1) Debt: secure a loan against the property you receive interest payments.2) Equity: record an option to buy the property (ex. you have the option to buy the property for $115k for a specified time period.3) Purchase a partial ownership interest, ex. tenant in common ownership of 50% of equity4) combo equity participation loan , you share in the upside equity.

If the new buyer & landlord are hoping you move out early you don't have to accommodate as legally the lease must be assumed by the new buyer.

Legally many jurisdictions cannot even discuss settling.