That said, unless the amount you end up losing is substantial it likely won't be worth going after with the cost of litigation and also the effort to collect. 

if my wife is paid 30% of collected rents to manage the property it will reduce my Schedule E profit.

This will impact you financially, because you will have more vacancy and each vacancy will cost you more money to get it rent ready again.And on the maintenance side, GE appliances or your local plumber don't care what you are collecting in rent.  

Collected first rent and everything going smoothly so far.

Rent collection and expenses can be managed through a separate business bank account under the LLC, even if mortgage payments remain personal. 

If saving more helps you put more down on the rental AND you want to buy quickly, consider that route.If you are slow playing your next purchase, maybe you go a different route.Personally, I do not mind being more liquid and collecting interest or investing in the market vs paying debt down, but that is me...

Your biggest risks are tenant defaults and rent collection issues.

I would definitely double check  ALL of the info they provide especially rent collected.

Screening tenants takes 2-3 days, 30 min per day as you collect paystubs and contact past landlords.

Basic services like garbage collection don’t qualify.Material participation: Owners must pass one of the seven material participation tests, such as:You spend more than 500 hours working in your short-term rental business.You carry out all the necessary tasks to run the business yourself.You work more than 100 hours in the business, and no one else contributes more time than you do (this is often considered the best and easiest test to meet).