I would wholesale any class C or lower rentals and try to flip the "best" houses to the retail market.That being said, I don't know your market or your properties. 

If the LLC has elected to be taxed as a corporation, C or S - they check the corporate box and are exempt from 1099s.

While I am familiar with good and bad areas in our neck of the woods, I am curious as to the criteria that is used to rate neighborhoods?What makes it an A?  Nice cars, no trash, big homes?Or a D?  Cars on jackstands,...

You might get your street to more of a C or B, then you can raise rents. 

Granted it may be ok in C or D class areas.

Can a trust own a C- or S-Corp too (or LLC taxed as C/S-Corp)?

Whether or not your tax professional is filing on a schedule C or not depends on whether you are materially participating in the on-going intensive management of the property.

That may be the move if you have a Class C or D property, where the likelihood of them paying is minimal.

You would include the rents as ordinary income on your schedule C or for your corporation and then you would deduct the typical expenses minus depreciation.

If you can't raise the money I suggest you chalk it up as experience and move on.It wouldn't hurt to fully disclose your plan to the lender, if you can show the ability to carry off the plan they may allow it to be brought current, but if you're not solid as to ability and experience don't bet on it.