Add in the fact that your friend doesn't place any value on your time, understand the amount of time it takes to do flips, and is not realistic about expected profits - I'd pass as the only thing you're likely to accomplish in this deal is losing your friendship. 

Would I need to pass a credit check?

Just make sure the house wont pass a Section 8 inspection .

I would pass as a straight investment.

The muni's like higher stuff like expensive houses, senior living, high end apartments, retail,etc. for the land that brings in big tax revenue.In our county they pass a law that you have to buy 5 acres or more to put a trailer on it.

I am not trying to obnoxious with this, so please know that my "voice inflection" is seriously asking this, but how in the world would a home pass a 4-point with the lower-half of drywall removed? 

If you pass a resolution that says the company will purchase a general liability policy of a certain amount for ALL of the managing members of the LLC in order to induce them to keep actively working for the LLC etc. it would probably be OK, add in your personal house and it is a problem because that is not furthering the interest of the LLC itself.

There is a little paperwork involved and you have to keep the properties to a certain standard so that they pass a yearly inspection.

She was telling me that the home needs to pass a 4 point inspection prior to being insured.

@Ryan Clark I pass a 3 bay carwash and 4 bay vacuum station weekly and constantly wonder if that would be worth purchasing.