I have a wealthy friend who owns numerous businesses.

If you are talking about making a loan to a homeowner, there are regulations you must follow.  

You will want to check the zoning regulations for the city http://www.waxahachie.com/Departments/PlanningandZ...There aren't any docs that I saw on that site but it would be best to call or email the contacts there and I'm sure they have the answers you are looking for. 

Here is a post with a link to a video of Jeff Watson, a real estate lawyer and investor, discussing wholesaling with a couple Ohio regulators:  Watson and Ohio Regulators on Wholesaling .

But from my understanding that is incredibly hard to set up and cost prohibitive (due to SEC regulations).I'm sure there are many ways to go about this, and would really appreciate anyone's input and advice.Thanks!

You can't just run around collecting fees for leasing property without being licensed and knowing what you're doing, you'd put both yourself and your landlord in risk by not knowing the laws and regulations involved.  

Since this is being done within an LLC (as it should), and since there are different classes of membership interests (2 that I can ascertain), there are multiple factors to work out, some of which apply even when there's just one class of membership interest:How initial capital contributions, for each given class, are booked.How subsequent capital contributions, if any, for each given class, are booked.How member loans are booked.How each member's capital account will be handled pursuant to Treasury Regulation §1.704-1(b)(2)(iv), and how reevaluation of said accounts will take place per Treasury Regulation §1.704-1(b)(2)(iv)(f), to conform with §1.704-1(b)(2)(iv)(g).How distributions will be allocated, including profits and losses, along with any resulting adjustment of percentage interests.How tax allocations will be handled - and if the book value of any company property is adjusted per Treasury Regulation §1.704-3, how that affects member allocations.I have not even covered every item that must be addressed (including voting rights, depreciation allocation, cash flow vs liquidation allocations (as in "when we sell a property - who gets how much of the appreciation, but what about the recapture, etc, etc.")).Insufficient information... and it's time to meet my wife for dinner.

MD is good but I'm not interested in dealing with their regulations.

And if Florida is too tough to lease option because of the laws and regulations, what state would be the best in terms of profit and laws?

By way of comparison, I see numerous properties in the Pueblo area that would probably cash-flow well right out of the gate, with numbers around 1.35% or so upon first glance.