I decided to pull in a group of friends (none of us have a whole lot of money individually, but together we have more than enough money to get started.)Something we're taking into serious consideration is the option to create an LLC to use as a means of acquiring property.1) Is this a good idea?

As for private lenders, that's a different story since they are individual people who may be happy with the arrangement you propose as long as their investment is secured and they receive the return you promised.I would think that the rates you would pay a private lender would make the investment a loss since you're going to be paying a higher rate.

Sometime though, there are properties that may get more individual attention if you let the buyers think they have an exclusive shot at a deal.

What can you do to protect yourself- Include language indicating you can cancel the contract in X days if.....  

I have 6 individuals interested in lending to me and I hope to demonstrate that we can help each other.My thinking is that I provide my track record, the resources at my disposal, my ideas for buy and holds and flips/buy and hold and future prospects.

When she responded to my letter she indicated that she filed bankruptcy 3 years ago and moved out of the house at that time and the house has been vacant all this time. 

Right now I do not have a substantial amount of capital to invest with, but thru my job I have built up a solid network of wealthier individuals who are looking for investment opportunities. 

Hi Walker,We typically will purchase individual or small pools from a fund manager or through a credible broker.

I need get to know some like minded individuals!  

Are those funds from a private individual or is it a fund?