Which you might not recognize until you've seen a few.

I recognize before I do such a transaction, even with the benefit of knowledge from this forum, I need to use a lawyer.

An LLC is NOT recognized as an entity by the IRS, because LLC's are state level entities. 

We have a crystal clear conversation about this at the lease signing.To show I am not a grinch - part of my agreement with folks is that every 13th month I discount their rent by 10% to recognize their on-time payments.

This may not be possible if 100% of the gain was recognized in Year 1.

I have looked into a serries LLC  but not all states recognize  it for example when I called CT gov. registration they told me I would have to register each individual LLC under the mother-ship LLC which makes this super expensive, a few other states were like this as well so, its hard to register as a series because there all registered under one EIN number.

You will know the right tenants right away because they will recognize their fortunate circumstances and will appreciate it.

Props to you for recognizing where your experience level is and what fits your current investment mindset.

the gain recognized from the exemption of sec. 121 is tax free.  

STICK TO YOUR PLAN (NUMBERS)#5 walked up on a pre-foreclosure and had a motivated seller, House was perfect for total rehab and addition for extra equity, huge lot for garage appt conversion. but my toolbelt wanted to do seller finance and she just wanted cash. we were apart about 15K and i just wanted to be at 65% ARV and she was at 75% ARV. i wont lie i was intimidated by the project scope. but what i failed to recognize was her pain. i did though eventually see it and when i did it was too late. by then someone else had promised her what she needed to hear. its never about the money...its always about the pain. can you relieve and help the seller with that pain. i walked in with cold hard cash when i needed to walk in with a both ears on listen mode. im not a good snake oil sales man but im learning the craft of listening. listen more than you talk, practice this with your friends and family try to keep conversations going with you saying as little as possible.