Worse case scenario, if the buyer defaults, I become a landlord again. 

Furthermore as many people unfortunately default to I wouldn't label Baltimore bad entirely. 

While completing a Cost Seg study, they were very resistent to me using 6% and because of time-sensitivity, I decided to default to the "rule of thumb" method that you mentioned and used 80/20. 

Lender has risk if as @Chris Seveney mentioned buyer puts a second behind your first  this causes the first lender to have to go through a full foreclosure to remove the second in a default scenario. 

If the lender does find out that a property transfer has taken place, and chooses to enforce the due on sale clause, the lender must provide the seller (debtor) and, if applicable to state law, buyer with notification of default under the mortgage or deed of trust, and specific time as specified by state law to cure the default.  

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Your 401k administrator will help you set this up and usually you have to make monthly payments. 4) If you default on your 401k loan, the entire balance is distributed to you, then you have to pay taxes and a 10% premature withdrawal penalty.

or will the engineer know what to do by default? 

As a default, I would say no business entity needed.

However, if you choose lenders that originate the loan (purchase/rehab/DCSR) to the LLC (entity) and do NOT report to the credit bureaus then as long as you do not default on a loan, the odds are slim that your borrowing activity will appear on personal credit.