This way I’m protected that I purchased low enough while the owner can benefit from the upside if I surpass a certain number.Has anyone ever tried to do something like this?

Worst case, you spend $400 and avoid a disaster; best case, you spend $400 and come up with some stuff that's not too important but that you can use to beat down the price.

Personally, I like to max out my Roth IRA for the tax advantages and protection that retirement accounts have. 

Which in my opinion, if the law was really put into place to protect consumers, LO's & RTO's are a lot worse financial option for consumers looking to purchase homes.The dumbest thing to me is its fine to charge them RENT for the rest of their lives, they'll never own anything, have very little rights, and you can raise the rent every time the lease is up... but if you want to help them actually BUY a home, they have to be protected.

Any recommendations on how to protect myself?

I should add, I am not sure how much we spend in beer at the local watering holes where our contractors hang out.

There was a time in the 70s the nation was in massive recession but due to mainly defense spending SoCal was still very bullish and prices doubled while the rest were in a tail spin, especially places like NYC were looking very bearish.

In addition, this is a C class apartment, where would you spend your focus and money to raise value?

If you put the property in the LLC and it is properly formed and operated then your personal assets should be protected.

The primary advantage for most is the psychological security that comes with believing it will better protect your assets.