I was going to have contractors remove the ceiling - adding Roxul insulation and resilient channels - and replace the ceiling/ drywall.

I am in process of buying a house and through a home inspection found Vermiculite insulation in the attic.  

It's insulated, has electricity, and a loft. 

I've also noticed that in several of these examples, there seems to be water damage in the basement from leaky walls - lower sections of drywall are removed, puddles, moldy insulation, etc...

They say in real estate is location, location, location but in Frostburg its insulate, insulate, insulate... it gets cold there! 

For insulation, look at Roxul Safe and Sound.

I am willing to take the risk that comes with out of state investing as it will allow me to build my portfolio faster, diversify across markets (mitigating risk) and also will provide more insulation or stability if you will as markets change.  

You have two reasons, and only two reasons to have an LLC, the first is that if you need to share the profits of a joint investment, an LLC provides a simple an straightforward way to do that (though there are others), 2ed is to insulate the owners of the LLC from the liability of the LLC, by moving funds from the LLC to your personal account, you are "piercing the veil" (you should google that term), thus eliminating any liability benefit that the LLC would bring you.I am often not this forthright, but your accountant is an idiot and he/she is going to get you in trouble (or in more risk than you think you are in...which is worse).

Essentially, all it takes for me to create another LLC is to fill out a one page piece of paper and give it to the bank and title company.So, each property is in its own Serial LLC and insulated from all the others for liability sake.I also utilize just one set of accounts, one accounts receivable checking, one repair account, one tax/insurance account, one advertising account, and one vacancy account.

Adding some value put in insulation this weekend, putting up gutters and some other stuff.2.