My recommendation is usually to keep each property in a different LLC to avoid comingling assets and therefore risks to those assets, and to contact your insurance provider in order to ensure the LLC is an insured party under the policy.

But also, wouldn't either party be able to borrow against his/her %50 share in the equity? 

that said you can always ask, you can always offer them cash to leave and if both parties (landlord/tenant) agree to end a lease agreement you can always do that. 

If you tried to do that into a different city or state, it is likely something will break.If you use 3rd party property management, it is helpful if you use the same one across your properties because each one has different systems and processes. 

My buddy and I are on our second property now and eying down a third shortly.

The closing costs of establishing HELOCs for a third.

Not sure how large your property is but we outsourced it to a 3rd party billing company. 

The tricky part is "distressed" because estimating the rehab is difficult.

Unless . . . you have signed a contract with a tenant (a lease agreement) or a property manager (property management agreement) which transfers the responsibility to the other party.

Just telling this to prospective tenants weeded out a few people who probably did want to host parties, etc.