In the Seattle market, condoizing costs around 15K (survey, site plan, recording fees, legal fees, HOA creation and coaching from lawyer, setting up utility sub-metering if required).

Its tough to give more advice without actual numbers to see the sale proceeds versus the down payments.Nothing wrong with a 50/50 split other than when it comes time to take out your share in cash other than split rents. 

It will actually take up a sizable amount of the unit.My question is, do we need to rent the owners unit from our own LLC?

There is a PAC coming and proof of other markets fighting similar situations.

If not, and if these are homes that are in a market where dispositions are not too daunting you are likely best served selling these homes and re-investing in properties that can lead to additional equity.  

What he actually did may be worse than what you are seeing on his record.2.

I'm looking to connect with more experienced BRRRR investors/realtors to learn more about how to build a team and the markets to invest in.

Getting such loan is actually easier in many cases than conventional financing, I've done it personally, hundreds of my clients did it, and thousands of other BP investors did it. 

My thought was could I get it under contract and then market it to be sold and at the closing i would just pay them what we agreed upon and i keep the extra.

Go with a background check where you can see what is actually in it not just them giving you a letter grade or pass go.