Personally, we spent about a year and a half listening to podcasts, reading a bunch of REI books, and talking to experienced investors before we felt the time is right.

It's about being a person great mentors want to help!

Should the landlord on the lease be our LLC or our personal names?

By turning it into a rental, you may be on the hook for capital gains tax in the future vs using the 250k exemption for single filer or 500k for a married couple that files together on capital gains if you were to sell now. 

The person does pay her back and she did report the interest income. 

I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). 

This is just looking at the end data without realizing the consequences.Families are now more "stuck" together; as in cannot file for divorce for financial reasons.

If you are worried about being over leveraged first look at your personal debts that are not producing income for you.Remember that when you are increasing equity in a property you are only reducing the risk of the lender.

This is a different person cleaned after cleaning people cleaned for a short-term rental. 

If it is a good deal then the right person will be willing to look at some private money options or even look to structure a partnership where they bring in the capital and lend-ability and you manage the deal for them.