This does not cover or protect you if you fail to disclose any little thing wrong with the house.

Of course an LLC can be added if additional liability protection is desired, but with an IRA, you must have an LLC to obtain checkbook control.Were you referring to the participant loan feature when you mentioned the Solo 401k supporting the business?

You should use an estoppel agreement to protect you from things like this.2.

for the most part, the people in 1st position dont really care because if you deal tanks, they are protected 

So you are already protected there.However, if you are sued personally for something happening in your life (car crash, …) a judgement can take all your investment away.

If you go that route, you might want to tag a RE lawyer in and make sure that all of the paperwork is done correctly and that you are protected. 

Some say that the benefits of this is that it gives you an extra layer of protection, anonymity (if you have the holding LLC in a state like Delaware) and additional ease in transferring money between the LLCs.

I guess I'm suffering from first-time homeowner panic :)

If you do something wrong or hide an issue an agent won’t protect you.”

@Michael McCloud the only thing stopping me from pulling out my retirement is that it is protected from lawsuits/bankruptcy as far as I know.