For my business I create my LLCs in Wyoming and NV as they have the lowest fees and the most protection.

Also, the seller may require specific types of insurance to protect themselves but ultimately another bit of YOUR leverage should be that he will have the opportunity to foreclose on you if you don't meet your end of the deal.  

My philosophy is if you buy right and are conservative with your numbers, what happens to the market on a macro level is less important because you have protected yourself against a potential "crash".

I know Brandon Turner has mentioned the idea of a credit partner on deals to lock up bank financing, but this is more for fix and flips and hard money.What are some risks I should be considering, and how can I protect myself from it?

As far as LTV and all that stuff I would rather not post publicly but if you want to send me a PM I would gladly answer any questions.

-Should we set up an LLC for this first house so it's protected, or is it better to wait until later to simplify things?

Deeds of trust are public record you don't need original note you can do a lost note affidavit and that usually works..

.; schedule showings and analyze feedback; assist with and analyze offers to insure you are protected, (ex., avoiding those trying to tie it up to resell or not really qualified, clarify costs involved or strange terms in offer, etc.); guidance through inspections (as many sellers get emotional and lose sale during this process), coordinate required repairs, resale packages, comps for appraiser to help avoid appraisal issues,  pest and moisture reports, walk-through, etc.   

@Maria Luna, a verbal month to month offers you ZERO protection.

Bank owned properties are a Total waste of time.....if you’re thinking to buy them before they publicly become available on mls or an REO auction site.