Although they will get you incorporated, they probably won't protect you when that first law suit happens.

However, what are you including for the expenses that you can't identify, such as vacancies (not technically an operating expenses), legal fees, evictions, damage done by tenants in excess of the security deposit, capital expenses (not technically an operating expense), lawsuits, utilities (even if only during vacancies), etc, etc, etc?

I assumed (incorrectly, of course, I'm a foreclosure newbie), that since the bank on each lien was the same, and that I was bidding on the action on the senior lien, that the junior lien would be resolved automatically.My title agent is stating that since the mortgage company did not name themselves as a defendant on the senior lien lawsuit, that their junior lien is still outstanding and must be resolved before we can sell the house.

You mitigate the risk of a lawsuit by operating your rental activity in a professional manner.  

A problem you may experience is that you are setting yourself up for a potential law suit - did you take unfair advantage of these folks - were you honest in your disclosures - did you make too much money - will you have to go to court to explain to the judge what you did and why?

There have been many lawsuits centered around right to privacy and calls for a statewide ban, but for now the requirements are there.

I guess this is more of a venting post than anything. 2 years ago I bought my first house to flip.  Here's the original post.   I stopped posting after everything started going downhill. To make a VERY long story shor...

You could reject tenants for poor credit history, income that a reasonable businessperson would deem insufficient to pay the rent, negative references from a previous landlord or employer, a criminal conviction, or a prior eviction lawsuit (even one that they may have won).

Hi all, I have to raise enough money to fund a lawsuit.

Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the “cause of action” arose in that state.