I did do market research, but it was hard to compare as most of the apartments were much larger in living space, had a tiny backyard/patio, and did not have a personal driveway with a security gate.

You can syndicate any security provided you make the necessary disclosures and follow the law.  

@Seth Rouch  If they're looking to improve their score / build credit, two secured credit cards that report to all three bureaus would probably help the most. 

Lays out what rent is, terms, Security Deposit, also need to get a copy of current lease.Personally, I would have No issues with buying with tenants in place, if everything looks good, Security Deposit, Current on rent, etc.

The $14,000 was that cash required to secure the hard money loan?

And is it ok to keep the security deposit for lost rent?

My concern is that if I do a rental property before officially getting a mortgage on the home (we are already pre-approved and are saving for the downpayment when complete), this will affect my ability to get that mortgage for my primary residence when it comes time to close if my name is on loan. 

With the long term tenant of 12 years, the security of the small return is worth the risk of the monthly cashflow.

How does it work with securing a mortgage loan under an LLC?

I can't seem to find any official documents stating this is the case, but I want to do some due diligence prior to acquiring a property.