When we purchased this property we were banking on interest rates coming down (RIP) to make a long-term venture worth the effort.We've been discussing options to make this property more financial beneficial to all parties (e.g., my wife and I and my parents) and have been discussing a private loan wherein my parents would pay off the balance of the loan and then finance the property to my wife and I at a lower interest rate (4.75-5.25% for 20-30 years).

I think it'd be beneficial for you to just play with it & see how it goes.

You might just sell all of them and put the proceeds in good growth mutual funds. 

If they are work force, then a strong hand can be beneficial, if they are working professionals like nurses and they moved a coworker in, id be a little less concerned. 

This also does not just apply to real estate but also stocks/bonds, mutual funds/ETF's, crypto, business, or other investments. 

Many states will require disclosure of the ultimate beneficial owner of the LLCs and will not allow a managing member to be a corporate entity without its/their manager members disclosed. 

But working yourself out of the job & having degree of separation from the tenants to the manager, or to the owner is extremely beneficial! 

Spend time vetting them and stay engaged.Entity structure: Forming an LLC is usually beneficial for liability protection and can simplify tax reporting, especially for out-of-state properties.

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?

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 :)