However, this means you’ll need to comply with the annual filing, franchise tax, and reporting requirements in both states.

An LLC with 2 +members does normally require a 1065 filing. 

The landlord should be named on the tenant's insurance policy for additional protection and to assist with tracking compliance.

I am considering building up on my fourplex. 2 additional units.

Given that you're not married, that adds some additional complexity.  

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

If you sell a property, and do a 1031 exchange with the proceeds, but don't need all the proceeds for the down payment of the next property, are you taxed on the additional profit that isn't part of the exchange?

You should always require them to add you to their policy as "additional insured" or "additional interest" and you will be notified if they cancel or change their policy.