It will all depend on the type of investors you bring in, their investment goals, your group's investment goals, risk tolerance, and many other factors.

Will depend on several factors like the type of property, type of tenants, your risk tolerance, other assets you own, your estate planning, laws where the property is located, etc.An LLC is a good idea if you're worried about liability in that as @Christopher Phillips said, any lawsuits would be limited to the assets of the LLC and not your personal assets (assuming you run the LLC appropriately and the corporate veil is not pierced). 

What is your risk tolerance?

Your tolerance for commuting stress is a big factor. 

@Steve Babiak I wonder if that data was from a property management company with a zero tolerance policy for late pays (like so many of them have)?

They may be tolerating a lot of bad tenants. 3% should not be used as a gauge to their quality as a PM.

I'd love to learn more about your goals and risk tolerance.

I understand that we have our own risk tolerances, but it seems impossible for us to invest in rental properties that generate supplemental income because of a low-risk tolerance.Perhaps it's a big picture discussion and there will need to be compromises from both sides but I wanted to see if anyone else has had to educate/convince their spouse of the benefits of rental properties.Thanks for your insight.

Breaking down multifamilies more, you probably can make more money with less desirable properties that you have to invest money into, but that takes time, money, and a tolerance for risk... there's a lot of guides on this website for all the different types of real estate investing you can do. 

Although I probably have a higher than average risk tolerance level, I do agree with @Nathan G.on not wanting to be over leveraged.