LLC offers better legal protection.3) Setting up in states that allow your identity to be hid is also overblown.

As a business, a judge will expect YOU to know all the laws and legal procedures.Make a minor mistake and the judge is unlikely to give you a break and may rule in the tenant's favor.The judge will see the tenant as a consumer and may give them a lot of leeway in court, even give them borderline legal advice.You are in over your head, not having the knowledge to properly handle this.

@Cristal Ochoa @Leiah DotlichI will preface this with the fact that I have a legal background, specifically with estate planning and asset protection.

An LLC is useful for two things: anonymity and legal protection.

Many of them have restrictions that you must owner-occupy the property for a minimum number of years - or you'll have to pay it back with interest.Also, the standard mortgage requires you to owner-occupy a property for a minimum of 12 months before renting it out.

Someone in the legal profession told me that we can give her 30 day notice and then proceed with an eviction. 

Alternative is the sherif evicts him and I pay tax and insurance.I know we can have a gentleman's agreement on these things, but im still afraid he might be able to legally sue me if we have a legitimate residential lease?

I am not sure of the legality associated with this and the issues of going from 4 units(residential) to 5 units (commercial) even if one unit will only be owner occupied.

I will preface this with the fact that I have a legal background, specifically with estate planning and asset protection.

This is for basic informational purposes I am not an attorney and this is not legal advice.First, if you offer to purchase a property using a HELOC to fund the purchase you cannot later back out of the agreement because you couldn't find PML or investors.