How could you say Gross Negligence?   

He did not and therefore he was negligent. 

Bad conduct or gross negligence is not well protected in any entity.

The LLC, if you are managing them yourself your issue is if you are found negligent or personally liable regardless of the LLC for your OWN actions.

Good management means you're not negligent in the first place!

You might structure your interest with a note.If you are in title, you will be on the security agreement, deed of trust, but you may stay off the note.Frankly, I don't mind personal liability issues with rentals, good management keeps me from being negligent and in any event someone chases me, I'll sick my pit bull insurance agent and company on them, no one here will get past the liability limits even if 20 kids fall off the roof or the place blows up.

Just get insurance to protect you and don't be negligent through good management and you'll be just fine.

You are not liable unless you intentionally did something or you are negligent, bot of these aspects are limited or eliminated by good management.

Partners are jointly liability for any acts of negligence.

Yes your tenants should notify you as soon as they notice any water leaks, gas /electrical problems and it should be documented in your lease, regarding how you would like to be notified (phone call/text) and who would be accountable and responsible for payment in the case of negligence (example: plumbing problem, plumber finds paper towels/toys in the toilet which has clogged up the sewer line-are you willing to absorb that cost?)