Mike -Forming an LLC is a good legal best practice to house a RE rental and would be a Schedule E transaction for you.

Is it a normal practice? 

There are many imperfections due to the carpet pad practically decomposing on them and also many worn areas.

I feel this is not a best practice, but I'm not sure how to improve it.

My banks didnt turn me down, I didnt move forward because their lending practices has changed within the last year.

https://sutlaw.com/practice-areas/asset-protection/asset-protection-attorney-asset-protection-strategieshttps://www.biggerpockets.com/forums/52/topics/1181145-moving-properties-to-an-llchttps://www.biggerpockets.com/forums/48/topics/1170797-how-do-you-protect-your-properties

And was simply a liability avoidance/consistent accounting practice issue.

An investor friendly agent can do all sorts of helpful things, like setting you up with a search for properties or connecting you with folks who have recently done deals like the ones you want to do. 6) Consider analyzing a deal or two in your local market, just for practice, with a free use of our Rental Property Calculator (or other calculators).

That books explains how it works and gives you all the practical tools to get started.

Solid income, and pay increases, often offset "stupid mortgage rules," like the 75% thing that everyone knows is too conservative, or letting departing residence rental income offset that mortgage payment but only that mortgage payment (you can't "use" the "change" anywhere else).One practical problem that I've experienced in the last ten year  is that since it's househacking, some banks can accept multiple leases into one home, some can accept single home only, and some can't accept it all.