The cost is minimal and as long as you run each LLC as separate from the rest and don't co mingle funds, you are protecting your 95 other properties from an accident that happened in one of the properties in the first LLC.  

@Atwan Kwan I understand about advising the client to take action against his wishes.I question the thinking on the process.I settle out of court all the time, but never miss a filing.I can be in front of the judge and if I have permission from my client to accept payment, I will do so (in certified funds, full balance) and let the judge know right then my client has decided to dismiss.BUT WITHOUT A POSITION OF STRENGTH, you can be played by a tenant who has no intent to pay and who only wants to delay the eviction until they've stayed rent free for the last few months. you stated the tenant DECIDED not to pay (obviously thinks he won't get his deposit back, or has no deposit saved for the next place).Unless your client is aware of that possibility and you protect him against it, you're missing the point.Hope for the best, plan for the worst.

ARV is about $180k (unconfirmed; not a lot of great comps and I haven't contacted a realtor for a CMA yet), the underlying mortgage is about $134k and they are asking for $147k (only minimal cosemtic work needed).

For the folks that legitimately cannot pay the rent, you don't want to be delaying your collections actions.  

Thats not to say that delayed gratification isn't an important concept, it is!

By no means is it get rich quick but given your pursuit of a PhD, I'm assuming your not afraid of a little hard work and delayed gratification!  

Maybe the requirements are different in each state/locality - however - the inspection requirements are extremely minimal in my county.

However, the definition of “passive” escapes me and there seems to be no concrete definition.I do not want to risk my status or possibility of delaying my green card application.I was hoping that someone can help me shed some light on my situation and how I can proceed in the best possible manner.

We are with the military and our housing allowance is 1400 a month which would go toward the mortgage to pay it down and do any minimal upgrading to qualify higher rent. 

If that is the case, I'm thinking about the delayed financing option to at least get 80% of my money back to put in other deals so I'm not sitting on the sidelines for a year.