I think 1031 exchange might be in my future, or an increase in rent.

With the flood insurance cost, this unit will be neg cash flow unless I increase the equity in the unit which brings it down to less than 5% cash on cash.

My question is: is it possible to raise the rent up to market rates if a new tenant is placed, or does the unit need significant upgrades to justify such an increase?

I think would like to renew, but they've occupied the property for some time and the rents in the area have probably increased.

I'd bet a box of donuts that you'll have a logo for LAZ, SP+ (Standard + Central Parking), etc. on it.  

Ordinarily I don't bother with CDs as their interest rates aren't enough to justify locking up my money, but I have my emergency fund in this product as the cash is still accessible w/o penalty, and rates are as good as most standard CDs.

I have about 150K to invest with the same amount in reserves (but could be used to increase my position).

A LLC will not provide any better protection at your point in investing and will only increase your operating costs and make it more difficult to get financing going forward.Insurance is the real protection, LLC is more for psychological protection.

It will end up saving you both a lot of time and increase efficiency.

I have a duplex that I am currently house hacking, which should cash flow about $400/mo when I move out, but am looking at the possibility of adding another bedroom or bath to one of the units, as well as possibly adding one or two units which could potentially increase the cash flow.