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

Forming an LLC for your rental property can offer liability protection, but no real tax benefit.

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

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

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

While an LLC can offer liability protection and tax benefits, it’s not essential for a single property—personal liability insurance and an umbrella policy may suffice for now.

It adds extra protection for your assets.

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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.

That's fewer individuals than active players on NFL rosters.