First thing I would do is check the zoning to see if it is legal to create a separate apartment in that space.If zoning allows R2, then it could work.

in Oregon U cannot.. in CA I suspect if someone filed a complaint you would have an issue.I mean other wise why even have real estate licenses.. anyone can just do anything they want like China.deals do get assigned all the time but as you state usually without any advertising. 

The legal limit for interest on a mortgage is 20%; therefore hard money lenders are well within their right to charge 10-15% in exchange for the risk they take and the benefits they provide.

Many of the same complaints as you are talking about now. 

This company will not own the rentals, because I do not want to trigger the Payment Due on Sale clause in the mortgage; the properties will remain legally in my name for now.

Or asked this way...will I have any legal issues if I went and borrowed UNSECURED funds from 4-6 people and tossed that money in my operating account to use as down payment and rehab funds for a BRRRR deal for example?

I have not had the best of luck with this arrangement in the past and wonder if it would be advisable/legal to have a different income standard when qualifying unrelated prospects vs a married couple.

As the property is owned personally by us and not the LLC, the LLC would not protect us from legal liability.

To me this sounds simple, legal and beneficial to everyone...but I want to make sure its being done right. 

The deed for that land could  have restrictions.No legal advice given.