If the property is just in a LLC it seems that there is still exposure for "who is tied to the property".

Doesn't the seller have a ton of exposure here for nondisclosure? 

A good CPA and Attorney (both should be on your team now if you're going to play big) can help you navigate entity type, tax treatment, liability exposure, etc.

The net result on the new property should yield a small paper loss for the tax return thus lowering my overall tax exposure and shielding the IRA withdrawal from income tax. 

I don't know if that's necessary, because one could get lost in such a big firm, but it defiantly puts a lot of things in perspective, and it gives you exposure to people who have been in whatever field you are looking into, with tons of experience.

With that tenant placement comes our eviction protection and lease break protection.Tenant Placement - With Great Jones tenant placement is a hassle of the past we take professional photos and get your properties maximum exposure; posting your units on 50+ websites including our own.

Another concern is exposure to risk related to him claiming mold in apartment.

That is why you want to "limit" your exposure by placing them into separate legal entities/compartments.

Setting up 1 LLC per property can actually increase your risk exposure.  

R there for exposure.