The owner of the property is basically a sole proprietor, renting his personal property. 

I am looking to wholesaling real estate and setting up a sole proprietorship.  What is the best type of liability insurance for that? Who offers that type of insurance?

Will you be the proprietor who brews coffee and wipes tables?

The bank is telling me that any purchases of 4 units or less will be treated sole-proprietor with the benefits of any regular consumer mortgage including 3% downpayment and lower interest rates. 

You may have to register the LLC as a "foreign entity".If the LLC only has one member (or a husband/wife in a community property state) and has chosen to be taxed as a sole proprietor then you're in luck. 

Sole proprietors can represent themselves. 

It can also be difficult to get financing in an LLC and credit while it is easy as a sole proprietor to get more mortgages, etc. 

For tax purposes LLCs can be taxed in 3 ways based on circumstance:-Partnership (default for multi-member LLCs)-S-corporation (works for both multi-member and single member LLCc [needs an election])-Sole proprietor (reported on personal 1040)S-corporations are extremely tax disadvantageous when it comes to buy-hold real estate.

You can start as sole proprietor and avoid getting cornered into commercial style loans.

I am in the process of using them now but they charged me a higher then what I normally pay in appraisal fees ($750 is what they charged me) and then they added a processing fee of $90 after I paid the $750  (and they didn't tell me there would be any other charges yes I asked) and now they need me to set up an LLC after they knew i was doing business as a sole proprietor or take 10% less LTV on my refinance which won't give me the capital I would need to make my next deal work.. so I don't recommend them at all, i don't know if they are a "full" scam but they definitely need to work on their process if they are legitimate.