@Jessica Mayo I've read that the average payout is $125,000 so your default coverage should be sufficient.

So if one person on the lease defaults, they are all still responsible.

Normally you want to put them on a lease option for the first year and only if they make 12 on time payments do you put them on a owner financed note because if they default it will be in that one year time frame and then your stuck doing a foreclosure trying to get an idiot out for 6 months 

The owner first gets a notice from the lender that they are in default, at which point the owner still owns the property, but it's considered in pre-foreclosure. 

Transferring the rental from your name to the LLC is typically a term of default under the loan documents (read through them to make sure).

Assuming its a liability thing if I default on them, then cant personally come after me.

Waiting on either default judgment or court date.

The comparable looks for sales of similar units and the income approach uses rents of similar units.Really the bank just wants to know that if you default and they have to sell, that they will get their money back.

Or has anybody used the strategy where they pay to get the property out of default and take over the loan, fix it, and then sell it?

One if you default its a nightmare for them.. plus they probably cant buy anything else with that mortgage on their fico.. if they ( seller ) get advice from any real estate professional I suspect that advice would be to not deed the property over unless they got a SUBSTANTIAL amount of cash out of you then maybe its worth their downside risk.