These are the things along with having approrpiate level of insurance (property/builders risk and general liability) to keep you out of trouble, not merely creating an LLC. 

This will give you several benefits.

What most often happens is that investors don't like the lower cap rates that prime corners provide, so they stretch their risk parameters to include similar properties but in weaker markets to get them the extra 1-2% increase on the cap rate.

Hey Pouyan, I have several Section 8 properties in the midwest.

I would assess the risk based on the title search.

If a PM is not going to hold themselves liable for breaking the law which is what this agreement says since willful misconduct is almost impossible to prove as it has to be premeditated - then that is not a risk I will take. 

Think broadly, chat with a QI (there are several of us here on BP), and try to get a gameplan together as quickly as possible (with backup options). 

This is more of a risk avoidance strategy and other people will have different opinions than I do on this.

Are there any major risks involved?

As others have mentioned this is a lot of risk with minimal upside, I am not sure it’s the best investment in my opinion.