I also about floor layering and how hard the layers are to remove.

A LLC does add a layer of protection but there are other options as well such an umbrella insurance policy.

Taking on money from other investors adds an extra layer of duty. 

If anything my understanding of having a property in an LLC adds an extra layer of protection from tenants trying to sue.

Insurance is your first fence line of defense, an entity can be second layer.

And, as you continue to buy more properties and form more entities to segregate your assets, you may decide to form a parent holding company to reduce tax preparation fees, ease administration, and add an additional layer of asset protection between your properties and you personally (shown as HoldCo, LLC in the sample organizational chart).As for which form of entity to use, it can be state specific, so you should seek advice from an attorney practicing in your state.

I am continuing to add value to the property over the course of this year I will allocating 40% of my saved income to refacing and replacing vital components of all three units!

The list is as vital as any contract.

It adds a layer of risk above other options for having someone else manage your money.In any case, if all these thoughts are overkill, just ignore and choose the 1031...

In addition, it has 3 layers when it should have 2.