@Joey Samudio, I'd recommend buying the asset with a normal 1031 exchange and then layer on debt for rehab after purchase.

Overall, I'd say this is a fairly normal deal.

California requires an $800 for LLC's that are doing business in California.California law suggests that managing members of an LLC that are a resident of California are considered to be doing business in California.Normally people will suggest opening up the LLC in the state where you are doing business(Normally the state where the property is located at).Others will suggest opening the LLC in a different state such as Wyoming, Nevada or Delaware for charging order protection, business friendly case law, anonymity, etc

Cash flow works on an inverse with risk, somewhere in the middle is normally the best place to start.  

Asking for POF (lender pre-approval, bank statement, line of credit etc) for a property like you have is perfectly normal. 

Tell him there is a termination fee, but you'll waive it if he shows a copy of the death certificate.That's what I would normally do, but it depends on how long he's been a tenant, how good he was, and other factors.

That might be normal and expected in IL.

So on Fridays he would take a few complaint cards that came in about the Mac and Cheese and personally call the folks of course to hear him tell it was quite humorous calling ( normally a house wife) and explain NO I am the President of STauffer and I want to hear why or how we can improve our Mac and Cheese..

I know there are some people out there who do this and put an assignment in place to be recorded if the loan defaults.As with so many things in REI, there are multiple ways to skin the cat, and it has a lot to do with your level of risk and your partial investor's level of risk.I do teach a 4 hour live class on this. 

Conventional, FHA, and USDA all have products with very low downpayment options and government-subsidized rates for first time homebuyers who have a normal income.