What liability are they avoiding by including this term? 

Banks aren’t lending to LLCs too much liability on their part.

I am wondering about liability as far as the pool is concerned, as I am in the process of renting each of these houses to families.  

However, insurance is limited because it only protects you from one type of liability: accidents/negligence.

The concern from others that I have asked about this say that this would open potential liability concerns from any issues/problems previous owners. 

You can establish an operating agreement that outlines the role of each partner, provides liability protection and can also cover a variety of situations that might arise (should one partner pass away, etc.) 

Turned into a house hack after the first year when we stated learning about assets/liabilities.

However, if the PM is directed to perform a duty and fails to carry out that duty, causing liability to the owner, then the PM might be held liable to the owner.In the end, everyone gets dragged into the mud. 

However, insurance is limited because it only protects you from one type of liability: accidents/negligence.

Hi Basit,I'm just starting of and looking at buying my first 2 properties in Canada before the end of summer.I'm definitely interested in investing in the US down the road for the next properties and this is something I want to look at beginning of next year.I'm interested in the limited liability that it can provide and the tax deferral in particular.