The LLC is there to protect you from liability when doing business by SEPARATING your business from your personal.

It’s the most dangerous thing we do everyday, we carry liability insurance through our personal auto policy.

I know i personally wont build anything with adjoining walls as the long term liability is to much risk for me.

It just shows up on your schedule e like a regular property.Other benefits are: limited liability/asset protection, reasonable minimum investment ($100k usually).Note that these do have risks just like any real estate and they are only available to accredited investors.

Trusts offer no liability protection.

Then they won't need an upfront payment for work they haven't provided yet.Also, get a signed contract, copy of the drivers license, contractor's license and be added to their liability insurance.

Moral of the story and my personal take away from doing it, budget well and don't spend your money on liabilities (primary home)  and buy assets (rental property)..... 

Some states passed laws after the last housing crisis which impose huge fines and liabilities for targeting sellers in foreclosures.

I understand that if you live in a state that does not have a state income tax - you won't have any state tax liability, but based on $110K income, you would be in a 24% federal tax bracket...Distributions from an IRA or Roth conversion would be considered ordinary income and subject to ordinary income tax; capital gain tax is not applicable here, so I'm not sure why you are bringing it up... 

CA has over $1 TRILLION in unfunded liabilities.