The only relation is the mortgage lending that is not subject to any lawsuit.The positive sides of this approach are . . .1) Lawsuit risk is only on main LLC with limited equities exposed.2) Majority of the asset value are very safe with the 2nd LLC.3) No management contract and checks needed between two LLCs.2) Little or no insurance is needed for the 2nd LLC.4) Terms of Mortgages can be arranged in favor to our cash-flow.5) Accounting and Tax to file for the 2nd LLC is very simple to DIY.I appreciate any opinions and comments of all aspects, especially the negative sides.

We are still safe in the Midwest :D

Then, if you have to lower the rent to keep it rented, you are still safe.

Vacancies in Cleveland range fairly widely, but I always estimate for a month's vacancy (8%) in my numbers to be safe.

Trivial sink use for drinking is handled by the booster tank until it kicks in.We can run appliances + showers + yard watering w/o issues and the 85psi is safe for the water heater.

If the contractor told him 70k, and he doesn't mention to us anything about mold, lead or asbestos yet he still gives us a list of repairs to be made them I'm thinking it's pretty safe to assume that none of those repairs include the aforementioned environmental issues you're now asking about. 

Let's say ARV of $400 on the safe side.  

Upper unit was renting for $750 and lower unit was renting for $720. 2-car garage, very safe area.

Just know that if it ends up in court, it will be ugly and expensive and "discrimination" is an all too easy weapon for the tenant to use to beat you into a lifeless, bloody pulp.Presumably, he's somewhat motivated to sell.  

Travertine is always safe, but you might think about doing something a little more updated.