One way landlords can protect themselves is always send a 1099 when required.

Understand that I’m personally liable for the mortgage but want the protection of LLC from property liability. 

This enactment protects the tenant anyway.

One of my rental properties suffered water damage and I'm wondering if I should file an insurance claim or just eat it...?

TLDR: If we stop using it as an apartment (not planned) or if it suffers more than 50% of it's value in damages (fire or other act of god), then it would no longer be grandfathered in and must convert to SFH.

Other matters, like your asset protection or business structuring, can be done with somebody else.

There is specific verbiage HUD requires in the purchase contract to protect the borrower and disclose some of the 203k contingencies to the seller.

If your looking for protection, you can use a series LLC if your state allows.

As a note owner, Ive had to do that to protect my 1st lien position. 

Maybe he is referring to using an FHA loan to purchase the property but that is only if you are going to live there... you can then move and use it as a rental but you can't purchase an investment property with an FHA loan (i am pretty sure... i am sure someone will fact check me on that).I would always purchase a property in the name of an LLC for the liability protection then just find a local bank who is willing to give you a loan for it.