It's not a lot of extra money up front, and it's well worth it in 3 years when a control board breaks.

Markets change, demographic change, laws change.Step 1 to getting into REI is getting some base knowledge and exposure, from there step 2 is evaluating your personal situation, resources, hurdles, preferences and choosing your own individual strategy and starting REI formation, no book can say what's best for you, a guide can't say you need to start as a wholesaler or a flipper, HML, Joint-Venture, etc etc etc.. 

You may have to consider a creative strategy to get them out like a pay to leave situation if they resist: offer to pay for the moving truck or application fee for the next place or even give them the last month for free...anything to get them out and get your unit up to market value so you can maximize your cash flow.A few points to note before you take action - be sure your area doesn't have any rent controls or laws restricting landlords from raising rent. 

I've also worked as a controller for a fairly large company.

What the borrower does is outside your control and has a huge effect on timelines.

This is a bit of an oversimplification, but in essence, the At-Risk rules state that you can only shelter from taxes an amount equal or less than the amount that you have at risk in the venture.

The only language I see is:"Borrower will not, without the prior written consent of SBA, make any distribution of borrower's assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by borrower, or any other companies"

I'd check with my attorney, some states limit the dollar amount that an LLC can be liable for, so at a certain point the cash and equity controlled by your LLC might be irrelevant and one or two could be plenty. 

The idea is to be able to control a property without using funds which are being reserved for investing projects. 

This is total Pareto Principle.  80% (or more) of your time will probably be devoted to placating him over this minutiae.Honestly, you've let him take control and it's time for your to reassert yourself.