I agree with the person who said they are likely short of money and grasping at straws.

Personally I’d do a 1031 to save $40k, I’d skip the LLC, increase the limit on my umbrella, and call it a day.

I've used to it myself to analyze all of the 35 units I bought over the last few years and personally talked to 100's of other investors who've analyzed and closed on great deals using it.I'd love for you to actually try it and would be happy to receive and incorporate any feedback you have into future releases.

As a person who has lived most of my life in metro Detroit, all I will say is be very, very careful. 

I then flip for a quick profit to a local developer/builder who is willing to work with the town to develop the lot or if its a home run I invest the time & money to permit them personally and sell for 10% under retail.  

Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.3.

Some manufacturered companies treat it as personal property not real property.

@Michael Plaks comments in this recent post on making sure the person you hire understands real estate sounds really relevant to your situation.  

@Raif Jochim I personally like having my primary paid off.

I suspect the person who originally turned it into a fiveplex only applied for permits to make a fourplex and then did the 5th unit fly by night (perhaps at a later date) in order so the property would still be considered residential and allow for better financing possibilities.