Sole Proprietorship versus LLC for a cash-out refinance?

[Stefan Aleksevitch]

Hi everyone! Looking for some perspective on my ownership structure, given that I am in a peculiar situation:

My situation: Last year, I bought a house (30-year conventional fixed) and did a lot of work to it; however, my career has moved me to a high-cost-of-living state where I am not able to purchase real estate. I decided to keep and rent this house using a property management company under my own name (sole proprietorship w/ an umbrella policy). I have been renting this house for a few months, it's going well, and I would like to cash out refinance so that I can buy another house.

My questions:

1) When I refinance, would it make sense for me to transfer ownership of both houses (original + newly purchased) to an LLC? I feel comfortable with the personal umbrella policy/sole proprietorship and understand that I may not get as good of a rate if I use an LLC. So is the liability coverage worth the rate increase?

2) Is there anything else I should be considering in this process? Is there any other option I may not be considering? Does anyone have any articles/books they could recommend to someone in my position?

Thank you so much for your help!