If you continue filing taxes jointly the income you realize from your separate property will still need to be explained and redacted, regardless of the type of entity holding the real estate.

I 100% endorse adding in the escrows for taxes and insurance to set the buyer/borrower up for success. 

They can only call the loans due prematurity if I default. 

Assuming property taxes + insurance added don't go above $1,100 total, you could maybe make this work. 

I have been in real estate for over 16 years and have never heard of a lender calling a loan due because you placed it into your LLC.

I lead our DST due diligence within our RIA, and what you are experiencing is unfortunate and rare if you have the right sponsor.

Much of this is due to the fairly low actual prop tax (rate actually paid) and that there are so many income brackets (many people pay no state income tax). 

You could structure the deal with seller financing to bridge the gap.Possible offer structure:-Purchase Price: $170K - closer to actual value-Down Payment: Low or zero down to conserve cash-Interest Rate: 3%-5% - or better yet, 0% if the seller will agree-Monthly Payments: Interest-only or deferred until the sale-Balloon Payment: Full payoff in two years when you sellIf he wants $200K, you can still make an offer of:-$170K purchase price + $30K as a second lien due at closing-Seller carries $170K at a low interest rateHe would feel closer to his number, but you still keep within reasonable investment limits.2.

So do your own due diligence on the actual insurer on the quote.

When you're older and higher income (higher tax bracket) you'll want to contribute to pre-tax savings (generally).