You did purchase the property in one tax year and are selling it in another tax year which satisfies one of the court rulings. 

Towards the end of last year, one of my buddies contacted me and told me his accountant told him that he needed to buy some real estate to lower his tax bill.

Is it better to get an LLC when I become a land lord to get some tax benefits?

It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

For example, what is the monthly revenue for the property and what are the "All In" expenses, including mortgage, taxes, insurance, utilities, repairs, etc...

If you need an LLC for tax reasons later, you can move title into an LLC later for a couple hundred bucks.

When you live in that duplex for 2 years and then sell you'll be able to take 50% of the profit tax free (the allocation for the side you lived in). 

so I used 1.5% as a property tax number, and I used $200 mo for insurance.

These are features like online renter payments, tenant portal (for payments and work orders), help keeping track of work orders, tax reporting features, and accounting functionality.

Am I setting myself up for a tax nightmare?