This is conflicting: "Any annual positive rental profit after all expenses and debt service goes to the LLC (as well as any losses). The contract also stipulates that LLC provides deed holder (the mother) with an annual statement showing all income / expenses for her tax return."

There is no sale here. It seems more like a strategy to co-sign but not actually lien the property which was put up as collateral. It's weird, but it might be fine in that State, legally.

However, the LLC cannot both have the Profit, and the mother have the Gross Details. Only one entity has the Gross Rent and related Expense. They really have to decide, then, if the LLC is simply a manager (even though they handle everything) or the mother is subletting to them. Because it's pretty obvious the mother is not participating (passive vs active).

Here's what I see around here, recently: You lease property from a bunch of owners, then you rent it out on AirBNB or VRBO and do all the tenant servicing. You are not managing it for the owners; you get the rental income and incur the expense and get to profit. The owner will have their lease income and some related expense, but not from occupancy turnover.