That is basically an extra tax return, legal fees for setup, bookkeeping costs (if you aren't doing it yourself), possibly an umbrella policy.

Both signed the lease, so I think I split it in half and give it to both and let them go fight it out.   

I am working on what to fill the extra time with at the moment.  

Consider remote monitoring tools (like security cameras), and budget an extra 10-15% for surprises.

I’ve been interested in getting into real estate as a way to potentially have extra income and also have more of a safety net in retirement, either through cashing in on equity or continuing to own rentals.

There are some exceptions to this but this is the general rule.The $150,000 hurdle shrinks to $75,000 if you are married but filing a separate return.Creating an LLC does not suddenly bypass this.In actuality, you created another filing requirement which your CPA will charge you an extra cost for. 

thanks for that so is 1.5% bad bc that's what that person messaged me  there is no regulation on Transactional funding basically its whatever you can negotiate.. 1% is the going rate from most.. some will be higher some will be lower.. just google around for TF funding and and talk to a number of those funders to find your best deal.there are half a dozen of these folks or so on BP that do provide this service maybe they will catch this thread or maybe you do some snooping around on the site and find them.

Keeping this as a rental would not cover the mortgage (we'd have to pay ~1500 a month including utilities) and we can afford the extra payment, but is it worth it when looking at appreciation?

But zero chance I would pay the extra to sell to this one buyer or expect debt to be forgiven. 

The goal here is to reduce liability.Consult an Attorney for Liability Options: An attorney could advise on setting up an umbrella insurance policy to add an extra layer of liability protection.