There is a legit chance of a loss of initial investment.  

You don't mention if that's the case, but I thought I'd bring it up.You also won't be able to recognize any loss on the sale if that's the case.

LLC) will impact liability, tax deductions, and reporting requirements.Rental income is taxed as passive income, and losses—such as depreciation and property expenses—can offset rental income but may be limited if your income exceeds certain thresholds.

Putting that amount into it will only increase the loss.

I did one house I may end up taking a small loss on, we'll see.

You can expect turnover costs, losses due to vacancies, and other expenses.

Apparently, not only did they sell at a loss, I didn't get any money back at all and they claim I owe them an additional $40,000 for "renovations" despite no work being done to the building at all. 

But you are required to file a Schedule E in the US every year showing the total rents you received, the expenses you had against those  rents and your subsequent profit or loss. 

Keep in mind it is a risk and speculation, if something happens(market tanks, job loss, etc) then you will be out money.

Legal consequences and potential financial loss that could have been avoided with timely updates.2.