Besides doing the title in an LLC name, does not release you from liability.

Like, if I give him something for an issue that's not my fault, then could I somehow be inadvertently claiming responsibility and thus subjecting myself to future liability? 

Greg, him being your rep now, he does have work to do on your side, and liability.

Each LLC has its own insurance, and my main corp has an additional 4m umbrella in case of any liabilities from my disregarded entities (LLC properties).  

Given all of these characteristics, declaring that a series is not technically a stand-alone legal entity may be a distinction without a difference, at least most of the time.The series LLC shares characteristics with the traditional LLC, including the benefit of informal management, an effective liability shield, and pass-through taxation; but a series LLC also has the ability to segregate and compartmentalize assets and liabilities within individual series.

The lender is going to weigh heavily on your credit history/credit score, your current debt and liabilities, the amount and stability of your income and assets, documentation from your tax returns, and the condition/value of the property being mortgaged.If I were in your situation, I would interview several lenders and find out what they require and what they value.

Risk is the basis for interest charged, however some lenders just peg a rate at what they think they can get, that's a money store approach and they generally mark up the price for money, most hard money lenders are in this category lending with limited underwriting factors.Also understand that an investor who approaches an individual who is not a real lender, takes on the liability of presenting the lending opportunity, much like if you were selling a bond.

Each LLC also have it's own property/liability insurance.  

The key is that the mortgage needs to be arms length and within IRS guidelines for imputed and appropriate terms.Since it is such a small amount and the seller is concerned about tax liability they may want to include the note in the 1031.  

http://www.michigan.gov/lara/0,4601,7-154-61343_35413_35429-118500--,00.html "MICHIGAN LIMITED LIABILITY COMPANY ACT (EXCERPT) Act 23 of 1993450.4207a Certificate of good standing.