The question really boils down to what you're trying to do and what level of asset protection you seek.

An LLC is a legal entity that doesn't exist at the federal tax level.An LLC can be taxed as a Disregarded Entity, Partnership, S Corp, or C Corp based on number of members and elections made.An S Corp is a federal tax status (that many states also follow) that doesn't exist in the legal world.An LLC taxed as an S Corp vs a corporation taxed as an S Corp is the exact same at the federal level (there are potential state differences).

It's been hard to find good fixer uppers that will have better returns, but I'm sure people do find them and do better.  

Multi Family is still very hot here and the properties you'll find in that price range are C or D level duplexes. 

However, the level of education your post suggest is not realistic and I do not know how to even get people that would be in this situation to a level of understanding that is suitable.

The level of scrutiny varies by inspector.I would say as long as your contractor is legit and not cutting corners, I wouldn't worry about the city inspection. 

And then I made a mistake and bought a fixer-upper duplex with cash from the HELOC, planning to refi it after 6-12 months seasoning. 

@Sarah Lorenz Maybe  a separate level where your master bedroom is so that you can just lock that level and make it inaccessible minimizing how much stuff you have to put away.

The basement is open with a full bath (we recently added during a sewer upgrade); the 1st level contains the kitchen, living, dining, and mud rooms; the 2nd level contains two beds and one full bath; the third level contains two full bedrooms (a large, nicely converted attic). 

I find very few truly wealthy individuals would deal at the street level..