Reason why is if you go to sell it, people are not going to comp it based on 40 year loan.

The seller is selling because of problems they may be facing. 

We're looking to transfer this into an LLC for liability purposes.From what I can tell, the best way to do this is to retitle the property, pay Chicago's expensive retitling tax, and set up an operating agreement, all of which likely requires a real estate lawyer (what $ base do we use on the tax, given we aren't selling it to ourselves, just transferring it?). 

It's the basic formula for selling an online course that teaches you nothing you cannot learn on your own.

Educate yourself enough to be able to identify if a property does or doesn't align with that goal.

If the exit strategy is that he sells his share to you, how are you going to finance this?

@Brett Coultas if you're a newbie, you want to be careful of an "investor friendly" agent selling you something they truly don't understand:(95+% of agents only know how to handle owner-occupied transactions - you can verify this by asking them calculate ROI for you or Cash-On-Cash!

I've gone from sfh rentals in my area to land flipping and now to building cabins to hold and to sell.

It also is helpful to have a California LLC in case you ever sell that property and move into another state so that you do not need to form a new LLC altogether with new operating agreement, just re-register in the new state as a new foreign LLC.

Could you put it on a CC and pay it off within the billing cycle with either your income or selling some stock if absolutely necessary?