A refinance into an LLC avoids this risk but typically requires a commercial loan with higher rates and stricter terms.If asset protection is the main goal, umbrella insurance may suffice without disrupting financing.

I am very interested in avoiding cap gains and recapture. 

Investors aren’t avoiding the work, they’re just focusing on higher returns and leveraging their experience.That said, even the high-level investors we work with still BRRRR single-family homes, they’ve just added larger deals into the mix.

Depending on how close I was to having 20% equity in the property and being able to avoid PMI, I’d consider using some of my cash to pay down the mortgage when I refinanced.

The proper answer is "it depends" I don't know anything about your case.I do prefer simple over unnecessary complexity.

Thank you I’ll probably do 5% down so I can avoid the PMI.     

Still, I think you'd find it difficult to find one that would be a good long-term investment unless you had another ~20-30 years to go, it's at least cash neutral, and you don't plan to hold it too long (to avoid too much investment loss and before you get to the point where it's unsellable because of too few years left); that's another way of saying that maybe it suits your cash needs in the near-term or is at least less of a pill to swallow than other options until you find something that's more of a sensible long-term play

Save yourself the hassle and avoid these common pitfalls no matter how much you like the name or "professional" you believe the entities may appear.

Refinance is one way to do it, if you want to avoid getting new debt because cash flow is high look into lease options to buy or executory contracts.

How are you determining income, avoiding fake paystubs & employment?