There are valid arguments on both sides to consider. 

While your strategy of creating a separate LLC for each property under a holding company is a valid approach for asset isolation, you should keep in mind that there are additional costs associated with setting up and maintaining each LLC.

If any of you could help me determine what kind of property damage I should avoid either because it costs too much to fix or it is just too difficult/ time consuming (things like termites, gas lines needing repair, roofing, etc.).

Hi,We have one unit of a 6 unit building that shares gas & electric with the building.

Someone from the company should perform a site visit of the property to do a thorough analysis and ensure eligible components are identified accurately.Licensure and experience: The firm should have licensed tax specialists and engineers and this is recommended by the IRS.Experience with your specific type of property: Not every property is treated the same whether it be office buildings, self-storage, restaurants, gas stations, mobile home parks, residential properties, multi-family, or car washes.

Alvara handles it at a cost but still valid point as I do it myself like many others. 

Probably not a valid reason to break your contract. 

Thoughts on whether it's valid, or how to protect myself?

I know there are valid reasons for it (e.g.

Valid reasons might include increased operating costs, property improvements, or market trends.Fairness and market rates: Rent increases should generally be reasonable and in line with market rates for similar properties in the area.