I think the most frustrating part is that if its not broken out we have to leave utilities on when they aren't paying.

There are probably some uptight agents out there that would hold you to that agreement but if not's not working out it's usually beneficial for both parties to go separate ways at that point anyway. 

This lease will automatically renew at its end date for a 1 year period if a notification of termination is not recieved by either party, in accordance with Move out Notice #20 noted later in this lease."

You could later assign the beneficial interest to another party (the LLC).

Which is better a tenant with 2 cats, or one with no cats that is late with rent, calls for repairs every week, has big parties, etc. etc.

There is no "moral" factor as long as all parties involved enter into the transaction voluntarily and with congruent, veracious information.

As a beginner, obtaining funding to back a REIT isn't going to happen, you'd never get past a broker-dealer's third party due diligence.The way you want to do this is via private placements.  

All available siblings would have to participate.Tthis is a process that gives all parties who may have interest in the property to make a claim within a certain time frame, if no claim is made by the missing sibling whoever filed the action will be awarded free and clear title..

It makes sense for him to come here and handle any loan with a 3rd party.

As a multifamily investor that uses property management companies I favor large sized properties because the economies of scale allow them to more easily support professional 3rd party management.