I think you should have a mutually signed written acknowledgement of the lease renewal each year. 

Do I accept the terms is it beneficial to me.

imho, some REIAS can be beneficial, but don't let em reel you in with pitches, memberships, etc - take your time and see if it's truly for you and something you can contribute to and ACTUALLY benefit from before they get your credit card info :)

Im not a big stock and mutual fund kinda guy.

If you needed the money ASAP that won't be super beneficial. 

However, he eventually reconnected with us, and we were able to reach a mutually agreeable price of $120,000.

If I were to start a small REI group how would you recommend structuring it so it was as effective and beneficial as possible for the people in the group?

Then if the owner wanted to sell and keep the house as a licensed STR, just change the beneficial interest of the trust.

It can be beneficial and nice if implemented properly.

Even in a best case scenario, you can probably get similar returns with a lot less risk and way less work simply investing in something like a mutual fund.