What would be the best way to do this for tax purposes, liability, and breaks? 

Tax BenefitsWhen buying in low cost areas, it can be difficult to achieve FIRE without high volume of units.

We are currently waiting to see the experience with the Florida LLC, re insurance, tax, beneficial ownership issues before we deed the Virginia properties into the LLC.

And there's the unpaid taxes for operating illegally... i'd give this property a thumbs down.

Rental property owners, did you know you can deduct expenses like mortgage interest, property tax, operating expenses, depreciation, and repairs?

Each year being worse than the one before with higher insurance, property taxes and wages?

(Someone to receive notices on your behalf)Residential income properties need a Transaction Privilege license in most locations (Rental Tax)Property Management is a specialty in the industry and it's very possible your sister has her license with a broker that doesn't allow her to do property management?

Let’s say we’re shooting for $50k tax saving per year. 

Because otherwise its becomes very difficult to manage these things.Do you know if there are any tax implications from moving the property in and out of an LLC for a cash out refinance.

And keep in mind this is in addition to your normal tax liability.