If you  have insured a 2 bedroom two bath home they won't pay for an extra apartment that isn't on the tax rolls and not on your policy. 

Hi Charles,Shop around for Landlord policies.  

The following bullet points paraphrase those comments:We want to avoid an unforced downturn by overtighteningIf we wait to see lagging variables like unemployment and inflation return to a steady state, we could easily overtightenWe are starting to see the economy slowingWe are now in a stage where we need to be thoughtfulA slower pace of rate hikes should be considered at this pointAll of the above is very important because it suggests the sentiment exists among Fed members to begin to consider a rate-friendly shift in monetary policy.

As its been said on BP, just keep the properties in good repair, have landlord/homeowners insurance, and an umbrella policy. 

He means that some properties are not in financeable shape like there is no stove, the kitchens are ripped out, health & safety issues, mold, the bathroom is not operable, etc etc.203k is a rehab loan program for FHA that combines the rehab money and the 30 year fixed FHA loan component into one product.

Tenants are always amazed and appreciative that their new home has new toilet seat covers because we replace them between tenants.They know their landlord has a personal interest in their health, safety and well being by my actions throughout the year.

I am looking at school districts, city rent control policies, annual incomes, neighborhood class, etc. 

There is no need to have an LLC especially since you have no assets I agreed with @Chris an insurance umbrella policy should suffice until you start growing your property portfolio.

Or does each city and state in the USA have a different policy regarding this?

One trick I've used in the past is simply stating that your land lording policies will cover anything over XX dollars, say $50 or whatever you think is fair.