Your fil and mil can basically gift you and your spouse 60k a year without gift tax under annual exclusion and more than that under lifetime exclusion. 

Ohio Revised Code:(A) Any security deposit in excess of fifty dollars or one month's periodic rent, whichever is greater, shall bear interest on the excess at the rate of five per cent per annum if the tenant remains in possession of the premises for six months or more, and shall be computed and paid annually by the landlord to the tenant.

@Marsha Rost, if you need to leave say $90k of your own money in the deal after 70% refinancing, then even if you cash flow $200/m (per Brian's figure), don't you agree that 2.66% annual return is nothing to write home about? 

I will let them, nothing wrong with it as long you approve where it is installed and they pay for everything from the device to annual fees.

If so, should I create the LLC as to where the investment property resides or would it be ok for me to create an LLC in Arizona as they have a low filing fee and no annual fee?

Paying $25k to earn $4.8k/annually sounds pretty good (19% Cash on Cash return before taxes), and you still have $15k in reserves.Alternatively, presuming all $40k goes into the $150k house purchase, the cashflow may cover the student loan debt payment, but you have $0 in reserves. 

The rents the 3 years starting in 2015 increased on average $500/month for SFR (over $100/month annually). 

There is much more involved than just 10 minutes to prepare the return.Also, if the CPA is able to do it quicker, that's undoubtedly a result of their experience and expertise.I'm president of my HOA and I don't prepare and file our annual returns.

You also need to track your annual cost of living index each year. 

On the other hand, keep in mind that there are costs associated with maintaining an LLC (such as the $800 annual franchise tax in California).2.