My partner and I want to hold investment properties in an entity to isolate our personal assets.  

No worries about LLC and personal finance isolation.  

I'd recommend not looking at property taxes in isolation.

When my pest inspection (only one I paid for) came back with termites isolated in one tiny spot, and leaking shower P traps, I was ecstatic. 

Try to buy lots where you can buy multiples and create bigger holdings. isolated lots are hard to flip.5.

Ask your lender if they have a "work around"For the inspection,  a pressure test can be done with an air compressor to isolate the problem.  

Sometimes we will spend hours trying to find a leak, turn up nothing then have to disconnect the indoor and outdoor sections to pressurize each individually in an attempt to isolate the problem.

But one thing that we know for sure: if you expect to receive the liability protection that is promised, you absolutely must isolate all of the activities of that specific property in that specific Series.If a tenant sues Series A, and he has signed a lease with another entity, then the Judge will probably allow discovery regarding the other entities to find out whether you are really operating this investment inside this Series, or you are spreading it all over.After all, in Texas we are still litigating the definition of "doing business."  

Just to clarify @Mike Fletcher, the importance of the formation of the Michigan LLC to isolate your assets is not particular to the fact that it was formed in Michigan correct?

This provides isolation to protect your personal estate / possessions and is your first layer of protection.The S-Corp is your operating company.