If someone wants to put up some of the money and be an owner than either that person doe a loan to the company in addition to his ownership or He or she can get a preferred return from the membership of the company.

If it were me, I would be reluctant to assume much at all about their knowledge level and areas of expertise.Happy to help if you have additional questions or thoughts.

Additionally, when you get to the property management side, there are clauses that completely misalign the incentives between owner and manager. 

Additionally @Jeremy Hua, central Ohio is more than just Columbus.

.- The home insurance after the sale (the new owner is the "insured") should retain the name of the previous owner(payor of the bank note) on the insurance as "additional insured" so as to not set off any alarms with the bank.- Use a 3rd party loan servicing company to collect all mortgage and escrow payments and make all appropriate payments to the bank lender as well as seller finance lender.   

There are limits on them and if your policy only covers 4 rentals, but you plan on acquiring more, you'll need another umbrella policy for the additional units. 

Would an underlayment I lay down myself be a better or worse option than the pre-installed underlayment or no underlayment and insulate the dropped ceiling below for noise reduction if needed?

Several you should pay attention to are:- Ordinance & Law: Provides additional building coverage to deal with rebuilding costIncreases due to changes in Zoning or Building laws- Personal Injury Liability: Libel, defamation of character, wrongful imprisonment, etc.

He wants to pay off the price for the home and only receive the additional 10K he put into it.

I appreciate the additional info and for pointing me in the right direction.