It also offers a chance to shift into something more passive, reducing the hands-on management that seems to be more of a hassle now that you’ve moved.That said, the rental income potential from your properties is worth noting, but there’s a limit to how much you can boost your cash flow, especially after already making significant upgrades.

So, to try to go a legal route because they might have fixed something a little over the limit isn't going to work.You will have to face that you selected someone that was not the right fit and be more hands on. 

So many scams like this it's getting out of hand!

I would get with the city asap and find out all the details on this.It could be possible that if the LLC changes hands that it loses it's exemption.

One of the REPS cases (I forget which off hand) they were basically like...petitioner states they spent 8 hours on X date supervising painters at the property and we find it highly unlikely that anyone would sit and watch paint dry for 8 hours. 

I just put together a flyer and hand them out. 

That's how I started, with a company called Flip More Deals (currently called the Growth Collective) they were very hands on and helped me through the entire process and connected me with a lender and gap funder, very hands on you should check them out.

On the other hand if they are a sponsor that is experienced in stopping a skin in the game, that's a huge red flag for me.c) how open to scrutiny are they?

Just make sure and do you due diligence before hand. 

<<< Of course that is what I am trying to tell you but don't confuse 'advantage' with 'different' -- if your goal to is maximize your return than you should be more hands on; if your goal is more to save time and hassle then let someone else do it all for you; in the end you get what you put in.