With that said, THIS IS NOT LEGAL ADVICE, only personal experience.

Legally it can be a grey area with family so you are probably ok to do this.

This could be any situation where because you had some form of asset protection, whether a legal entity, adequate insurance, or something else, the outcome for you was better than it could have been.I am NOT interested in how your asset protection is configured unless you can demonstrably say you have used it. 

One  (the good one)  no compains in almost 5 years,  she pays on time (most of the time) her part of the lease,  one time I had a really bad tenant,  she was in her 20s with 5 kids and no job,  Housing authoirty was paying the 100% of her lease but anytime I was on the property she was with  some "visitors"     normally more than 5, after having osme discucions becasue she was not a clean lady I asked her to leave,  the good thing is she moved out without any legal action,  Be careful accepting the tenant,  even they are coming with the voucher,  you need to do your due diligence all the time,  credit score is not an issue but eviction yes Good luck 

That way you can learn more about the process and I'm sure they'd be happy to talk with you about licensing/legal requirements.

Permits have been issued with blue prints available! 

Does this work and is it legal?

You'll need one anyways to create your PPM.Disclaimer: I am definitely not anything remotely close to an attorney, and thus not qualified to give actual legal advice.

What are the legal ramifications/liability concerns with doing this without an LLC?

That would not be legal