Please let me know if I'm missing anything here or what else I need to consider.

I'm wanting to partner with 2 friends to form an LLC to buy rental property. We don't have a ton of cash so my first thought is to buy Homepath FNMA REOs that require only 10% down. So that we don't run into the 4 property limit as soon, the plan is for me to buy one in my name, then person 2 in his name, then person 3 in his name, and so on.

So for property 1, which will cost $100K incl closing costs: loan from Hompath for $88K, plus 12K put down by me, which I received from the LLC.

I will immediatly "sell" the property to the LLC under contract for deed for $100K, of which 12K is the option payment and $88K is the balance of the loan.

To form the LLC, we each put in $8K for a total of $24K equity. $12K goes to me to make the down payment and the other $12K stays in the LLC bank account for repair/vacancy reserves. The opening balance sheet looks like:
Assets:
CFD for Prop 1: $100K
Cash: $12K
Liabilities and Equity:
Loan balance for CFD on Prop 1: $88K
Owners Equity: $24K

Income Statement:
Rent Revenue: $1100
less PITI: -$661
Less vacancy and repair reserves: -200
net distributable cash flow: $239

$80 distribution to each investor for per month on an $8K initial investment.

As the MTG balance drops, the equity position of each investor increases, once paid off, the CFD is exercised and equitable title transfers to the LLC, and I no longer hold a financed property in my own name. At that point I hold a 33% equity stake in an LLC that has a fully paid for property as its asset.

For property 2, partner #2 will put the house in his name and we will each make the same equity contribution and repeat the process over again, rotating the name on the loan until each of us hold the 4 financed properties in our names. That should give us a limit of 9 to contribute to the LLC in addition to the homes we live in.