This establishes the legitimacy of the arrangement and protects against audit risks.

As for the legalities of setting up an LLC to protect you and your partners, I would consult with an attorney for best judgement. 

I have looked for examples of landlords that were protected by their LLC and always come up empty handed.

It adds extra protection for your assets.

So, there is even more risk.The things that you can do, include being properly capitalized, not be greedy, (in whichever way that may be defined in the county you are buying), know solicitation laws, know Dodd-Frank, the Consumer Protection Act, the S.A.F.E.

A FHA 203k Loan is where the purchase price and rehab costs are rolled into a single loan.The downside of using FHA or a FHA 203k is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC.

I did that with my first two primary residences.

For real estate investors, adapting to these changes isn’t just about avoiding fines—it’s about protecting your investment and maintaining a solid reputation. 

I completely agree with @Ashish Acharya's points about the cost-effectiveness of a HELOC and the potential credit implications if it’s secured by your primary residence.

Whether you’re dealing with non-payment of rent or other lease violations, this resource explains what landlords need to know to remain compliant and protect their investment.