@Alina TrigubThanks for the response. 

I am not sure of the purpose or if this would be beneficial for me now. 

You just need a roommate release from her stating she has left and has no responsibility for the remainder of the lease term or security deposit.

For example, if something happens in Property #1 (Owned by LLC #1), they generally can't go against Property #2 (Owned by LLC#2), etc.Having plenty of insurance is also important.The main thing is that everything gets done on the up and up and get done properly.As for state income tax liability, a lot of it depends on how the LLC is set up.For IRS purposes (and many states) by default, a LLC that's owned by one person (or a husband and wife in a community property state), is usually what they call a Disregarded Entity.

@Cole Hagen my feedback would be: 1) don't commit income tax fraud by purposefully under-reporting your income, I may be wrong, but I'm pretty sure the IRS rule is that other/misc. income in excess of $600 must be reported, and 2) if you ignore 1) and do chose to not report it, it's probably not a great idea to post about the fact that you're considering doing so on a site where you have your full name posted, how easy would it be for a Google search to turn that info up or for someone to report you to the IRS based on this post?

@Vinay H. thank you for your response!

I would also be interested in the responses as well. 

Also making them a landlord would make them responsible for filing taxes etc.

We look forward to continuing our journey to serving a bigger purpose!!!

In which case the loans is satisfied upon the winning bid you are not responsible for the remaining part of the loan.