Does anyone have any suggestions on how to mitigate this?  

This is an easy way to help mitigate risk.

Going forward, I would like to create different LLCs for my properties to help mitigate the risk but don't know if this is an industry norm in the residential world. 

Other than that, i see that basically every vendor working for insurance comes in through water mitigation or other quick response restoration work.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

Because there is no flex in this period after day 45 we always highly recommend that you actually get your new properties under contract during the 45 day period to mitigate risk. 

If I can get some opinions on inherent risks associated with this as well as any ways to mitigate them that would be much appreciated!

I don't like investing into a hot market but idle cash is costly and I am mitigating risk with the right opportunities (good locations, value add, cash flowing, prudent debt). 

Whether your tolerance for risk allows you to scale to larger purchases, or you'd rather mitigate some of that risk and buy smaller properties is totally up to you, your goals and your comfort level.