Sometimes when a contractor does not get paid he has no way to pay his subcontractors for the work and they also file leans against the property.

As a new flipper with no experience Hard money can be really expensive that's why its best to try that approach to partner up. 

Turnkey generally don't exist and value add generally makes no sense from a business and financing overview.3.

The new loan would be 30 years at around 8.15% interest but of course not have PMI (also no fees, points, etc since they are incentivizing me to refi with them as my current servicer).

Forget about the people that have to agreed to move in with you, there is no shortage of renters, as long as you have a decent property to offer.

Candidate 1 with no kids might have less wear and tear on the house and they have a better credit score. 

Deegan and @Arda Bircan There are technically 7 Tests for Material Participation (but 3 that are most common) -> the individual 500 hour mark, that the activity of the individual is substantially all, and that the individual participates more than 100 hours + no-one else spends more time than them.Litmus Test: Are your hours integral to the operationsThe hours that qualify must be substantially all hours and have a legitimate impact on the rental activities.Activities that generally count: showing the property for rent, taking tenant applications & screening tenants, preparing & negotiating leases, cleaning & preparing the units for rent, repairs, and improvements, managing the construction, purchasing supplies & materials, inspecting the property, responding to tenant complaints & inquiries, collecting & depositing rents, evicting tenants, writing & placing advertisements, and working on your websiteActivities that don't count: education & research, investor-type activities, and travel time..

It's totally generic so no way to connect with the seller and identify the problem.

In terms of a tenant that has paid before and had a lease, who refuses to now pay or no longer has a written lease - this is still a matter for housing court as they are a holdover tenant, not a squatter. 

We each hold a 50% interest in the LLC.The values of each house are approximately the same, and there are no loans or outstanding debts.He wants to cash out so we thought a good strategy might be for us to sell one of the houses, and let him take all of the proceeds, and for me to take full ownership of the other one.Essentially, I am looking to swap my half interest in one of the houses for his half interest and the other one.