Suppose a loan changed hands "Subject To" and it went bad and there was a lawsuit that went all the way to the Court of Appeals and was all over the banking pages.

Over the last two years I've actually made more money settling Do Not Call lawsuits with these jokers than I have earned from my actual real estate portfolio. 

Too many things can go wrong and wind up in a law-suit. 

- one thing to note is that LLCs are not as protective as you might think. people usually put properties in LLCs thinking they could never personally suffer from a lawsuit, but holding a property in a single-member LLC offers the owner little to no legal protection. so if that was the REASON you want to open an LLC, i wouldn't bend over backwards to get one started before buying your first property. you could always do a quit claim deed to the llc later on, if you buy something in your personal name now, and open an llc later.- another thing to consider if that llc filing fees are sometimes expensive enough to wipe out half your cashflow for the year, especially combined with now having to do a tax return for another entity (if you pay someone to do your tax prep, which you prob should with any rental property).- lastly, some loans REQUIRE you to close in an entity. knowing ahead of time what type of loan/lender you're going to use on your first property, might make this decision easier for you.hope this helps!!

Thanks for any help.It could be a previously unrecorded government lawsuit lien.

I have also been told that lawyers will zero in on quit claims immediately for LLC lawsuits because they do not benefit the buyer and the can use that to determine that the person who transferred the deed to the LLC is part of the LLC.

I had to answer that lawsuit, but the judge dismissed it for a lot of reasons.You do have problems about how to file your tax returns if you start joining your significant other into existing single member LLCs. 

I owned SF rentals for many years, and had 14 at one point without any lawsuits.  

A "Lis Pendens" is actually enough to trigger a "Slander of Title" claim and record owners use it to defend their property in a contested quiet title lawsuit.

As a result the possibility of lawsuits is very high if the entire contract is not set up to precise standards.