Those are areas that, if they match with good data, are your target markets because you either have more personal knowledge of the area or have real boots on the ground who you trust already.

I wouldn't trust GS as far as I could throw them...... lets see how many people want to take on a 10% APR loan..... :-)

Obviously you still want to know, like and trust them to some extent, but if they're just using liquidity to guarantee the loan, and not really going to be involved in the day-to-day, then their personality/vision/goals becomes less important.

Can we gift all the member interest to our family trust and still qualify 1031?

He knows, likes, and trusts you now.

The two owners have 50+ years of construction experience between them, and I trust them implicitly. 

You can refinance the first trust and in the process of that transaction subordinate the second trust so it remains in second position.

In my eyes, the biggest liability is trusting me as an investor to generate cash flow.

Trust me.  

Trust me, individuals can go VERY WRONG in real estate.