Since you still have a mortgage on your first property, transferring title *could* trigger the due on sale clause if the mortgage holder looks into it.

With a quality provider of such plans, you will also have access to meaningful guidance with respect to IRS compliance.   

After a year, I pulled the trigger.

I strongly suspect (without even seeing your loan docs on your personal loan), that transferring it to your LLC might trigger a due on sale clause and the bank could call your loan, if they ever found out. 

So technically you can sell as yourself and buy as a disregarded LLC for purposes of federal compliance to sec 1031. 

I'm in the process of my first one and I think the best way to see if it'll work is to pull the trigger and give it a shot!

Or does the note servicer perform any compliance actions required for the state where the note is recorded?

Don't be afraid to pull the trigger but don't jump the gun either.

Real estate is where I've wanted to build my success for a while, but I've hesitated on pulling the trigger for fear of failure.

As it's my understanding AZ is a community property state, you could treat the 50-50 husband-wife LLC as disregarded and file Sch E under Rev Proc 2002-69 instead of a 1065 to save compliance costs.Talk to your tax CPA/EA and attorney.