I want my kids to grow through their struggles the same way bodybuilders or athletes grow through their struggles.

If in the event you do have a very high external risk profile that might attract a real lawsuit (a drug addled teenager driver) then acquire the level of umbrella insurance commensurate with your real risk (not phantom risk from some imagery "predator" instilled in your mind from a group scare monger selling you an LLC template).I would go even one step further and say an LLC in practical effect may actually INCREASE your risk profile as it could easily lull you into a state of complacency running your operation both in a careless and reckless manner.

But, it didn't take marketers to convince me that I didn't want to raise my family in a neighborhood where seeing passed out drug abusers sleeping in business landscaping was a normal thing. 

Are you ok with non-violent drug related?

If you are a pharmaceutical company who spends lots of $$ on R&D you keep debt low so if a drug flops you can limp along until the next drug hits the market.  

Then the police raided and tore the place apart looking for drugs, and THEN it finally went to auction.  

More moving parts, emotions and D potential (death, divorce, disinterest, drug use, default etc) the more potential for problems!

If you fight it they will bring criminal charges that could include federal drug charges, money laundering, RICO, non RICO conspiracy.Step 4. 

And the "depression commodities"; sex, booze/drugs. 

So I'm looking for some advice on which course of action you all would recommend:1) Keep the tenant (who wants to renew and has paid the rent), despite their maintenance issues and the rumors they're part of some drug cartel I hear from the neighbors... but get a new property manager or manage it myself if I can correct their deficiencies.2) Look for both new tenants and a new property manager (or do it myself since I did a better job vetting tenants to begin with).3) Sell it.