I suppose this is a good problem to have, but the liability potential has me convinced I need to speak with a proper lawyer and CPA professional.I have read through Garret Sutton's first book (Start Your Own Corporation).

I would just keep it in your personal name and get extra liability.

Along with the entity formation expenses if you create the separate management LLC, you will want to have general liability and perhaps even E&O or professional liability coverage.  

This is one of their biggest advantages as they often bypass the personal liability and credit reporting of traditional loans.

I also want to payoff the property to reduce my debt liability and make it easier for my family to deal with should anything ever happen to me.Are there any negatives to paying off the SBA-HEDCO property loan now?

I would like to insure only for total loss and liability.

This is different than merely being a certificate holder and have appropriate insurance (builders risk and general liability). 

Permits are a pain but liability for a poor renovation is brutal. 

Kentucky and Ohio differ as to "corporate veil" In Ohio there is just about nothing you can do short of fraud to expose the member of an LLC to liabilities of the LLC.

Texas has no requirement for an operating agreement, but I would like to have one as I hear the general consensus is that (if done right) will help with liability protection.