Why do people use LLC for "buy & hold" rentals that have mortgages?

[Dan N.]

I am confused on this topic and I would like some input. I am going to acquire a few long-term rentals over the next few years. All properties will be acquired with a mortgage. Initially, I was sure I was going to create an LLC (for legal protection) for each.

But over the past few weeks, I have discovered:

1. LLCs that are owned by one person don´t really provide any protection

2. Umbrella insurance seems to cover you and your assets better than an LLC in case of a lawsuit.

3. If I buy a house under my name, and transfer it to an LLC owned by me, there is a slight chance it could trigger a due-on-sale clause (especially if interest rates rise).

What am I missing? Why do so many people purchase long-term rentals (with a mortgage) under an LLC?

Thanks in advance for your feedback.