Then there's the guarantee that money will go to people that don't need it while ignoring people that do.

You had the chance to inspect the building and the unit and incorporate it into your purchase price.As far as a difference between the initial MLS listing saying there was a lease, and subsequently finding out there's no lease, the MLS listing means very little and at the bottom of every printout or web page you'll see language to the effect of "information deemed accurate but is not guaranteed and buyers are advised to due their own due diligence" etc.Basically it means that while the agent should not deliberately lie, they can't be held responsible for inaccurate information there and you were advised that it could be incorrect and told to investigate further.

You are going to end up signing a personal guarantee for the mortgage anyway, so the LLC won't help. 

If I give him the full amount of $1000, how can I guarantee that he will pay for property taxes and insurance? 

@Dylan Topolnisky  I can guarantee you it will go up and down :) If you are into it for cash flow, who cares about up or down, 10 -20% ? 

These mortgages have no clause for forbearance and no protection for borrower, some of which have personal guarantees.

I have the opportunity to purchase a rental property that will have a guaranteed rent.

Any money, IE: application processing fee,  is not specifically applied to the information requests ordered by the landlord which is why they are generally non-refundable and do not carry any guarantee of any performance other than evaluation of your prospects as a tenant.

I thought of seeing if they can pay at least half then I would pay the other half but I have no guaranteed they can pay me back when things get better.

Of course your high paying wage slave job is guaranteed to be Depression proof and will provide you the money to ride out multi years worth of negative cash flow so Welcome To Oregon, our new motto is "If we are all gonna go broke anyway, might as well do it where the scenery is nice".P.S.