Lease to own, “subletting” a STR

[Jan Paikin]

Hi team Pockets,

We are in early discussion with a Seller to do a lease-to-own Seller Financed deal on their 3-unit property.  They want to stay in their unit for 5 years and we are ok with that.  

From a business formation standpoint, as the "leasee" essentially subletting the other two units can we/should we create a business (an LLC)? What's the advantage in this scenario?

Our initial thinking is we want them to stay on the Deed to utilize tax exemptions  (as we may pay do portion) they are receiving as it saves $7,000 / year, but they are still paying $7,000 / year. But it also prevents us from writing off property taxes (up to $10,000), so does that even become a benefit to us?