This must produce positive cash flow to protect downside. - Understand the upside of the "rent by the room" strategy- Understand the upside of any repairs that can be made to the main unit. - Understand the cost/value of completing an ADU project- Underwrite mid-term and short-term upside cases as well. 

I know LLCs are a protection tool with no tax incentives but with those come higher insurance/fees versus staying in your name. 

Key issue is to protect your family.

I am very confused what a 401k trust is because I don't see it listed in the types of available trusts below.https://wyomingllcattorney.com/Wyoming-Asset-Protection-Trus...I know land trusts don't offer liability protection if the tenant sues the trust's beneficiary.

It helps you establish one economic unit to meet material participation hours.If you are in higher income tax brackets, I suggest getting a multi-member LLC for audit protection.

If you have the mortgage in you name, would the LLC provide any protection against a lawsuit?

A year ago my asset protection cost doubled over night.  

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

My recommendation is to protect that rental investment when you do find one, and hire a professional property management company! 

In many cases right now, I am pleased if the operator stops distributions in order to build up reserves and protect the asset - as long as they are sharing the reasons behind it.