As a new flipper with no experience Hard money can be really expensive that's why its best to try that approach to partner up. 

The new loan would be 30 years at around 8.15% interest but of course not have PMI (also no fees, points, etc since they are incentivizing me to refi with them as my current servicer).

Forget about the people that have to agreed to move in with you, there is no shortage of renters, as long as you have a decent property to offer.

I to,d him if he thought selling Cutco knives was challenging, imagine trying to sell a person on investing $50k or more with a sponsor that has yet to perform in this RE market (regardless if the value add is smart and likely to do well).  

Almost to the point where it felt wrong.. netted more money with almost no extra effor.

Negotiate price, closing costs, and repairs, conduct inspections, and perform a final walkthrough.

No problem. 

It's totally generic so no way to connect with the seller and identify the problem.

We each hold a 50% interest in the LLC.The values of each house are approximately the same, and there are no loans or outstanding debts.He wants to cash out so we thought a good strategy might be for us to sell one of the houses, and let him take all of the proceeds, and for me to take full ownership of the other one.Essentially, I am looking to swap my half interest in one of the houses for his half interest and the other one.

In terms of a tenant that has paid before and had a lease, who refuses to now pay or no longer has a written lease - this is still a matter for housing court as they are a holdover tenant, not a squatter.