I love what the LLC brings to the table in terms of protection, however I hear banks dont loan to LLC's  for residential projects.

Obviously, put this all in writing to protect all parties. 

But should something bad happen, you will be happy that you have some level of protection by having it permitted.Downsides of pulling permits: you can open yourself up to more work than you thought. 

This will protect both of you in the event something happens with the sewer line; who is responsible for the repairs and cost.  

I did not receive any sleep that night and I had strongly felt that the new management had failed in its number one priority: to provide a secure living space for its residents which is protected under the implied duty of habitability.

Discusshttps://wtop.com/dc/2020/01/dc-lawmaker-hopes-bill-will-protect-affordable-housing-and-increase-tenant-protections/

Nothing protects against risk better than scale.

There is nothing really much you can do, besides using trusts and other asset protection techniques to hide your personal name from the property.

I would recommend getting a Warranty or Special Warranty Deed if you can to protect your interests in the asset so you can keep it. 

@Michael Dang is right. small landlords will suffer. the big ones, well, I've never known a big landlord who suffered.