Call a business attorney and ask them questions about LLC and decide if you think it’s worth it and how it should be structured.

I am mainly interested in the best way for Sibling #1 and I to structure this loan/transaction.

Do they have their own bathrooms?

Upon further investigation and additional measurements, I am thinking about the possibility of putting them in the "spare room" on the other side of the bathroom.

I have contacts in my area for bathroom, kitchen and other remodeling at a good price point. 

But if you are handling this as a flip, just putting it in a list...Upgrades to the house since its purchase on August 2018:  paint living room, paint master bathroom, new kitchen counter, terracing yard with retaining walls, planting XX bushes and plants, adding drains to basement and yard, replacing living room lights, …The idea is to honestly market the house, identify the work, but do not focus on it. 

But you will learn very quickly to give tenants either a sheet with all the “things” to do if say, the bathroom heater goes out, or the ductless heater unit wont turn on, etc etc You will also learn to talk the tenant thru the steps to take for each.  

Thanks all for the kind words of encouragement, @John Fedro The way that I structured this deal is as follows: Tenant buyer put $2000 move-in fee and $725/month for 96 months.

Upgrades include a remodeled kitchen with newly installed cabinets and countertops, new premium stainless steel appliances, vinyl windows, remodeled bathrooms, new flooring throughout, elegant entry door, and a stacked-stone fireplace that ties in perfectly to the comfortable layout of this home.

Upgrades include a remodeled kitchen with newly installed cabinets and countertops, new premium stainless steel appliances, vinyl windows, remodeled bathrooms, new flooring throughout, elegant entry door, and a stacked-stone fireplace that ties in perfectly to the comfortable layout of this home.