As to the goal of paying off properties vs using debt, I think this is a function of your age and risk tolerance.

It is on the nicer side of the apartments listed for rent in my area but has a functional but funky layout.

That really is a great form of leverage that I have relied on for the last 2 years.Option #3 I really think is a function of how hard an investor is willing to work at option #2.If its not a good deal and the current rents can't sustain the mortgage and expenses DO NOT BUY IT.

The price to enter is so much lower than most markets around the country, while the employment market is robust and vacancy is under 2% in the area.

This home had not been updated since it was new so I renovated the kitchen and bathrooms to be more functional. and had new flooring put in throughout the entire home.

You certainly need something a bit more robust to do apartments.

It's functional.

I work in the Janesville and Beloit markets and these markets have given investors some robust returns for the last 3 years.

LLC's don't function the same way c-corps do, so no...you don't need to issue stock shares or anything, unless your articles of incorporation require it. 

Would getting a more robust policy that covers you completely make this economically unviable?