It may seem smaller, so less risk, but the risk is the same.

In addition there may be other taxes owed by an LLC like franchise tax, foreign entity tax, (foreign means out of state), capital stock tax, etc.Some insurers charge LLCs more for insurance than real people, and some banks charge higher fees and interest for LLCs versus people.There are other forms of asset protection including don't do stupid & risky things, umbrella insurance and asset stripping.

Does this sound too risky?

They're going to be much smaller, but perhaps less risky.

If you have that much solid equity, it's a risky position to put yourself in.

The MOST influential factor is the lenders/investors ability to increase yield or reduce risk. I

This seems pretty risky to me given the favorable foreclosure laws in Texas.

This linked article is a good read too:An Investment Manager's View on the Top 1%Living below your means is both responsible and admirable, but I agree with JScott that growing one's income and learning to earn more while controlling risk is the mark of a good investor.

How are bandit signs "risky"?

Matthew Terry here is the requirements for primary residency from IRS publication...trying to subvert that rule puts you in a risky situation that you do not want to have to defend.