How to Set Up Residential Mortgage Loan and Partnership?

[Dan Park]

Currently, my partner and I are looking to pool funds between a few investors to invest in rental properties. After looking at both residential mortgage and commercial loans, I would like to investigate residential loans further(at least for first couple properties). Would greatly appreciate it if anyone could help with the following questions.

1. Given that residential mortgage loans cannot be made to an LLC, what is a common practice for splitting the cash flow or profits? Can you have separate LLC and operating agreement on splitting the cash flow?

2. Given that property and loan are made out to a person, how big is the legal risk? Is it common that landlords are litigated? What kind of insurances are out there? 

Thank you,

Dan