We talked to the tenant and offered to help them market the unit for a sublease and in less than two weeks are securing the paperwork for a one year sub with no gap in rent payments. 

By pooling financial resources, we secured the property and funded the $25,000 renovation, ensuring the project was well-capitalized from start to finish.

If a legal issue arises with Property 1, only that property’s assets would be at risk, protecting the equity in Property 2 and any other properties you may own.Asset Isolation: Isolating each property in its own LLC helps protect your assets from creditors or lawsuits targeting a specific property, thereby providing a more robust legal shield.Financial Management and Bookkeeping:Regarding your concern about financial management and the practicality of handling multiple LLCs:Centralized Banking: Using a holding company’s business account and credit card can simplify your bookkeeping.

Leveraging his local market expertise, we swiftly negotiated the purchase at $190,000, securing the property under favorable terms that allowed us to capitalize on the quick resale potential.

I agree with all of this HOWEVER I will say, if you have a unique product to offer to the market, you can attract even the highest quality tenants in the rougher areas, especially if they are secure properties that are close to downtown.

The ones in LA I have spoke at they are really robust . 

I am not suggesting you can't be successful building a SFH portfolio and to an extent cash flow is necessary to operate the portfolio, secure financing etc., but SFH's are one of the more inefficient asset classes to own.

Additionally, it can help you avoid the risk of having an offer accepted but not being able to secure financing in time.

You should never ever ever provide a loan on real estate without it being secured.

Owning the property in an LLC does help with your debt-to-income (DTI) ratio, but it can make securing a loan more challenging.