Mainly:pro: asset protection, anonymity (depending on the state), estate planning (fair value gift tax exclusion every year)con: creation and maintenance cost, limit the ability to get mortgage, bookkeeping and tax reporting cost, proper use to avoid piercing the veil.LLC is not a replacement for liability and umbrella insurance.

You could just have them lease you the property and have them allow you to sub-lease it, but that does not help with the coverage of liability for them.Best thing I can think of that would cover both of you is to create a seller financing deal where they sell you the house for the agreed upon price and you make principal and interest payment to them on a 20 or 30 year amortization schedule, but have a balloon payment due to them in 1 or 2 years for the total amount due.This gets the house in your name, and you can refinance it into an FHA or VA once you can qualify for it, but also covers them, because it is out of their name, and they will be getting the lump sum in a year or so. 

Therefore, if you can’t rent out your single family house it turns into a liability rather than an asset.

Would think it would be a little more involved as you would need to show most people how to work it and I worry about the liability part.

Additionally, are folks familiar with the liability that comes along with owning a rental property in a seismically active area?

The reason being one of liability.

Make sure you have proper liability / structure insurance in place if you allow it (even if you don't!)

Regarding refinancing if the note is called - my limited understanding of these trusts is that the trust becomes the owner of the note, and thus responsible for payments, refinancing and whatever liability happens from the due-on-sale enforcement.   

Approach it as holding a note and explain the benefits and takes them out of the liability position. 

I have spoken to the HOA more than once in the last 2 weeks - and I have several emails, including three sent today to various reps in the HOA, to create a long paper trail.From what one of the HOA reps told, the community has a problem with roof leaks and they are looking to replacing every roof in the whole community (they raised our dues twice in the last two years, with the claim being it needed was to change the roofs).If something goes sideways here, I don't want the legal liability to land on me because the HOA is taking their sweet time in handling this.