I am looking to purchase a multi-unit within the next six months so I would like to shed some light on this topic before I get into something that might not be ideal for my situation. 

However you'd be out the LLC filing fees in the latter situation, so the LLC would appear to be disadvantageous if viewed solely through the lens of income tax compliance.If you're looking to avoid tax I'd suggest you read up on a "like-kind exchange" aka a "1031 exchange". 

We’ve definitely had emergency situations come up and they seem to handle it. 

However, the question is very broad that responders to your post may have a hard time finding where to start.They also don't know your specific tax situation so it is hard to provide you with specific advice. 

I am moving it because it is the best way to deal with this situation long-term. 

It's one of those situations where everyone knows everything about everyone else and i was definitely not aware of this dynamic when i decided to buy and move in.Getting back to my tenants/neighbors dilemma. 

So, in your situation, you could rent the property out to see if you like being a landlord.

But I don’t want to put 5k in escrow at risk if I can’t get funding.Have anybody have gone thru this situation before?

I think the only right answer is whatever the best answer for your particular situation is.

Also, I travel a lot in my primary profession so I have no issue with vacating my condo and finding another living situation (maybe a small apartment) if I'm able to develop a passive income stream by doing so.