So like I said, I'm no banker and hopefully one will chime in for you.

My banker said I should sue the sister in-law to get it taken out of my name (so it goes against her insurance).

I am about to close on my first property and started with FHA, which didnt work out because someone told my banker false info which made me not be able to get the FHA loan.

My first step would be to talk to a GOOD banker.  

You need a banker, broker, accountant, lawyer and real estate agent coordinated to educate you and insure you are on the right track.

I've considered the LLC thing myself but afaict to be effective it seems to mean:1)   you cannot do any work on the property yourself nor interact with the tenants yourself (showing, leasing, etc).2)   you must hold periodic,   and regular "board" meetings  (you, your banker, accountant, laywer, etc) and keep appropriate records.  

Myself- I am a Realtor with Coldwell Banker Premier Properties

If you have a history with your banker he will work with you. are you in an llc?

While you are educating yourself, compile a group of professionals for a team that will work for you. ie. accountant, lawyer, realtor, contractor, banker etc.

I'd recommend pulling your credit and talking with a couple different mortgage brokers and bankers.