What would typically happen once the exemption is exhausted.

Obtain good liability insurance (some liability coverage can often be included with the landlord or commercial policy).Updating Lease Agreements: If you have tenants in the property, you'll need to update the lease agreements to reflect the new ownership by the LLC.Planning: Assess the overall costs and plan the order to do the items.Finally, while this list covers several points, it is not exhaustive, and the complexity of the real estate and tax laws means there may be other issues and considerations.

If your business can't withstand a few months of no rent, you probably should have planned better.

Does it make sense to buy something nicer with a bigger mortgage and exhaust our savings, or go cheaper and have savings left for another house when the time comes to move?

Know what a double tap breaker looks like...know what is required by code (like an exhaust fan over a stove).  4.

If you truly exhaust your list of banks and lenders, wait 14 months and try again.

Ok @Jeff Langley, here is a short list of lenders that offer some kind of HELOC on investment properties - Wells FargoBank of AmericaUS BankFlagstarPenFed Credit UnionAlliant Credit UnionFifth Third BankTD BankThis is not an exhaustive list and the lending requirements are much stricter than on a primary home and many branches aren't familiar with them.

If you're unable to withstand a recession, you're not properly situated to invest in these houses.

Likewise the savvy realtors at the other agencies locally will contact him after they’ve exhausted their in-house resources if they think I might want something.

While I cannot exhaust this conversation on this forum, I will highlight the main advantages.1.