In case things do not work out I would like that instrument to be easily enforceable in court without necessity to re-record after say 2 years etc. at the same time I want to make sure I am compliant with Dodd-Frank Act, predatory lending etc.

LLC is not a necessity.  

The hot water tank not so much, but the last one failed so it was a replacement out of necessity, not to increase the value of the property.

I like owning necessities. 

This is a ignored necessity that has put more landlords out of business than you will ever imagine.

As markets continue to rise around me I have finally made the leap to look into Cleveland as it fits my criteria (I'm a cashflow person (appreciation is a plus but not a necessity) and conservative when it comes to what i'm looking for properties in C+ and above working class areas where vacancy rates are not high, tenants are stable, and listing price is no more than 80k (cashflowing around 200-300 after all expenses would be a sweet spot).

Providing AC is almost a necessity these days.

You'll each see the necessity, the value and the costs of the money your partnership needs, and you'll be able to quickly compare your current cost of funds with the market rates.When you can not reach mutual agreement on the value of a service provided, disagreements can be settled by having one person create a proposal he/she believes to be a fair arrangement, then allowing the other partner to choose which side of the proposal to accept providing the service required, or paying for it (from his/her share of the cash flow). 

You can also get a feel from the govt. if they have any interest in someone doing something.If you are trying to set up some sort of easement by necessity argument then you probably want to just start the process with a lawyer.

As far as the car goes, I find it to be a NECESSITY.