If you give money to the prior owner who was already in a financially unstable situation, it may not get paid and you will be in trouble.

I've been getting advice that I need to setup an LLC for asset protection. 

It's like the lawmakers think every rental property is owned by a billionaire, when in reality most of them are small time landlords who have no rights and can be financially ruined by these tenant friendly laws.Thanks,Christian 

Why do you believe there is a financial advantage to spending money on the exterior of that property.

I also was thinking LLC to protect against personal liability. 

Depending on the equity that you have in the property, you may consider an LLC as an asset protection tool.

I'm new to co-wholesaling and would like to protect myself on all fronts.

You typically don't want to invest money that would cause a major impact to your financial life.

My husband and I are relatively new to Real Estate Investing and are seeking to grow a portfolio of cash flowing properties in order to  achieve financial freedom and ultimately support our desire to serve as missionaries.  

Generally, it depends on your networth and what you are trying to protect.