I wrote the post a while back so the rules concerning this type of a structure have actually gotten better. 

The rate you are offering is very low so I wouldn't be too concerned.

As an insurance agent the liability is extremely high and I can't imagine finding any policies that would make it financially feasible.Local municipalities also have regulations regarding short term rentals so that could be another hurdle depending on your city/state/HOA/etc. 

That is EXTREMELY high.

With a 15 year loan, you'll  find yourself with an extremely high payment to make each month. 

@OpeOluwa Oloyede If your concern is to help your friend, then @Shadonna N. is exactly right. 

I was thinking of offering to pay some of their first month heat bill since I know it is going to come in extremely high. 

Appreciation is an extremely important factor to consider for larger investments because it has a noticeable impact on your bottom line upon sale... but that's the key thing to remember. 

My original concern was should a flip fail to sale and must be held as a rental, how should we move the property out of the C-corp owned LLC, to a flow through entity with out triggering a tax reassessment or tripping over any issues with my lender.

Properties there are red hot and usually sell extremely quickly.