However when we purchase a house like this we almost have to do an interest only loan like a flip with 20% down and they can give us draws on the repairs. 

The work should be broken up into draw schedules.

Ask about the tenant population you’ll be drawing from.

@Michael PlaksYou could just do a draw on your LLC then use the money as you wish.

I found BiggerPockets in part because I was casting a wide net looking for possibilities after pricing out a set of drawings this past winder for possible spec house to build this spring to sell or rent and then deciding new construction prices and market risk in my area seemed to high for me. 

Furthermore, the divide between the "haves" and "have nots" make renting the only viable option in many cases.

The LLC can help you when it comes to tax season, but it's primary function is to provide asset protection.An experienced attorney would be able help draw this up to you.

Also, make it clear that dividing up the deposit, whenever and however that occurs, is between them.

Do some research on drawing up a business plan.

Are you really on top of what needs to be done, enough to write a quality scope of work and draw schedule for your contractor?