It may make less cash flow/ per month but in may cases in the long run after PM fees and Repair costs, many times it turns out similar.   

Landlords mistakenly ASSUME all PMCs offer the exact same services and operate the exact same way, so price is the only differentiator.So, the first question they usually ask a PMC is about fees - instead of asking about services.This also leads them to ASSUME simpler is better when it comes to management contracts.

I want to cancel TODAY and get a refund of the $390 + tax membership fee. 

While this structure offers great asset protection benefits, it doesn’t necessarily save money on filing fees or administrative costs.

Be first position until he gets the construction loan, at that time he then will have the construction loan buy out his PML out an pay any accrual interest and origination fees.

Any pitfalls, hidden fees, or learning curves I should be aware of?

I have a property manager, but my checks are only a few hundred a month if I'm lucky after all the fees and expenses.

However, it may be prudent to wait until you acquire property in that state to create the LLCs to avoid paying all the necessary filing fees when you have nothing going on yet.  

You would spend far more on Marketing, background checks, tenant placement, repairs, and possibly legal fees with the eviction process.  

Spend the 12k on a sump pump instead of lawyer fees.