My attorney says he prefers it when there is a business reason for the state of the LLC, and he said either your home state or where the property is located is suitable.A much bigger topic is whether or not having an LLC is a good strategy given your personal situation. 

You are in a tricky situation. 

Consult a real estate CPA or tax attorney to assess if the benefits outweigh the fees and risks for your situation, and consider alternatives like 1031 exchanges or installment sales for simpler strategies.This post does not create a CPA-Client relationship.

Complexity in Management: Managing multiple properties as collateral can complicate financial situations, especially if one property is underperforming or requires significant repairs.3.

And it most likely will.There are some loan products available for low downpayment if you are willing to do a live and flip situation. 

@Kasondra Milton- hi there ...thanks ...Raised in the fairport area ...live on west coast now ..last summer I had to return to Roch area to help with a family illness  situation ...I stayed in a AIRBNB that was close to Strong hospital for 3 weeks ...in my search for places - I must say I was surprised at the lack of options ( at least at that time ) ...that being said - I agree with your comment about the fact that Greater  Roch  likely  wont  attract a large amount of renters consitently  ( outskirts  like  finger lakes are a diff story ) - thanks and good luck

There are some other dynamics that also will likely play a factor in making the situation great for investors...such as runup in home prices and interest rates probably created a permanent renter class of society. 

Any advice on what to do in a situation like this would be greatly appreciated!!

Even if you have a property manager the  injured party is going to claim you knew about the situation or should have known, so you’re equally responsible. 

@Pete Tarinthere could be tax benefits - you might be eligible for passive losses, but it would be specific to your situation.