I practiced in front of a mirror and my family for days.

I suspect an Bk attorney would advise you that you don't qualify for a BK.I suggest you consult with a very good real property attorney, preferably one who practices in the area the property, or better yet the foreclosure Trustee is located. 

If a legal issue arises with Property 1, only that property’s assets would be at risk, protecting the equity in Property 2 and any other properties you may own.Asset Isolation: Isolating each property in its own LLC helps protect your assets from creditors or lawsuits targeting a specific property, thereby providing a more robust legal shield.Financial Management and Bookkeeping:Regarding your concern about financial management and the practicality of handling multiple LLCs:Centralized Banking: Using a holding company’s business account and credit card can simplify your bookkeeping.

Does anyone know how it works and best practices?

We frequently hear investors chasing properties that meet the "1% rule" which in my opinion is a  flawed underwriting practice (have posted on that very subject a few times in these forums), but in order to achieve a 14% cap rate your Gross Operating Income must nearly meet 2% of the assets cost assuming your operating expense ratio is at 35% (which is very lean on operating expenses).

Are there any resources, legal advice, or best practices you would recommend for pushing back against overreaching regulations?

I feel like they are making closely-guarded secrets available to "the rest of us", for a price which (FOR WHAT THIS IS) is practically giving it away!

Spike was as a result of Trump tariff on Canadian lumber dumping practices and Covid shutting down logging, lumber mills and trucking.  

Is this a common practice? 

Then your client's manager calls to ask you to reschedule because her daughter has soccer practice.