1) Use it to purchase primary home, keep for 5+ years and then do a cashout refior2) Go straight to buying rentals that may or may not cashflow nowChoice 2 has the issue of further downside risk in addition to negative cashflow (tenant issues etc) in a correcting market.I would like your takes to this scenario, you can propose a third/creative option if you'd like.

This type of deal is tough because your agreement can be deemed invalid if she was not of the (right sound mind) when the transaction happened.It could be very bad press for your investment business also if it goes south.Some deals are just not worth taking on because of the layers of potential downsides outweigh the upsides. 

A little bit of a lag between when the renters starts the process and when it hits the bank , that is the only down side that we have seen. 

(Understand this is a CPA question, but appreciate any help)4) Are there any downsides of having an LLC vs. one of us investing in their name? 

It would remove the doubt from your position and I fail to see a downside.

Or just someone taking huge calculated risks with little downside?

There's plenty of other downsides to it such as jealousy, risking relationships, etc.

The only downside was that the tax rates were quite a bit higher than what I am used to here in Arizona.

That is to say:b) I made a list of everything that I didn't understand and things that I feared could contribute to my downside as an investor.

In our research about REITs my team and I came across another downside.