The original post here helps illustrate that.

With your big plans for 2018 - I'd certainly go this way.Now, if you want to get out of the dealer status - it gets tricky, with tons of legal issues, as illustrated by @Ashish Acharya.

That's the most extreme example but (hopefully) illustrates the point.What I worry about for a lot of investors (paralleling this) is that they want to use an LLC as a way to get around umbrella coverage.

As illustrated above with this one case, I think you're blowing this out of proportion.

Here is an example to illustrate what I mean (using round numbers for clarity, but would work with any figures depending on the investor's materiality threshold): Let's say I have 4 properties each worth $500K and I have 25% equity in each (total of $2M in property and $500K in equity).

A further illustration that air sealing is rarely done well ... or, in this case, at all.

By your answer Im hoping to create an illustration of a potential worst case scenario for this type of investing.

To illustrate say you have 15 properties making $400 each.  

This is a great thread and it illustrates that there are multiple ways to make money in Real Estate.

And @Ronald Rohde wins the thread with his succinct illustration of why you need a good attorney on your team!