I only lumped taxes and other expense to simplify the post but I understand I'd separated one might be able to optimize and possibly see where to have savings. 

For a residential, that gets depreciated over 27.5 years as per IRS, so if you divide by 27.5 you'll get your annual depreciation =  $5,454, let's round it up to 5,5K[Again, this is simplified as things get more complicated in the first year when depreciation is prorated and get even more complex if you accelerate depreciation with a cost segregation].So, now if you have positive cash flow of, let's say 10K, you''ll have to subtract the depreciation and end up with a taxable rental income of 4,5K. 

You should have 100K or more in equity to protect before it makes sense to spend that money - compare that with how much you spend in annual insurance for the same property/equity (on the same FEAR principles, just in case your property might burn down).Again, this is a simplified rule of thumb, as there is a lot more to the LLC question - when to do it, how to do it, current mortgage, proper transfer to preserve title insurance chain, DOS, future financing, management, distribution of properties per entity, insurance, partners, etc. - stuff barely touched in current thread.There is no one-size-fits-all - the risk threshold is a subjective measure particular to each individual.

@Yern Chao Your gain would be calculated by using the following formula:Sale price - selling costs - basis = gainBasis would be calculated as follows (simplified):Purchase price + improvements - accumulated depreciation = basisThere are other factors that contribute to total basis, such as closing costs, expenses prior to placing the property in service, other assets, etc. but we will use the above formula for the sake of simplicity.With that said, your basis is likely not $237,500.

-There's no way we were going to try to keep up with the color scheme around here so we are going to simplify and pick one color.

This a general simplified definition. 

They don't have any closing costs which is nice and simplifies problems with cash flow. 

Looking for ways to simplify the process and not have anyone say - This was added or this was redacted, etc.Thanks in advance for your time,

You're trying to simplify and own fewer units or move geographies where they're located.The 1031 exchange allows you sell investment property and buy new investment property while indefinitely deferring the tax and depreciation recapture. 

It simplifies things a great deal, and the total equity held in each LLC comes out to about the same nationwide.