Hi Scott, A significant advantage of the LLC is the limited liability protection it provides for landlord & other situations in case the completely unexpected happens (accidents or injuries causing medical bills, etc.)

I actually hold each property in a separate LLC for liability protection.

It doesn't hurt to take a few extra precautions to protect your investment.

--What are the typical legal documents and terms that are set in place/signed to protect you? 

Yes, as the note holder you are entitled to the full amount due plus late fees, legal fees, and money spent to protect your interests (paying taxes securing the property, etc.)

In addition,  if I later decided to rent apartments as a Landlord, I might also want to seek the protection of an LLC, along with the additional Insurance Expense.

Responsible for setting the tone of the landlord/tenant relationship, responsible for providing safe and suitable housing, responsible for enforcing the lease, responsible for protecting your investment and ultimately responsible for making your tenants happy!

In some states if you are dealing directly with the owner, instead of a listed property through an agent, there may be laws to protect the homeowner.

The title company (or escrow or however settlements are handled in TX) should protect you.

I've been to multiple homicides where the bad guy was stopped because someone had a weapon and wasn't afraid to use it to protect themselves or someone else.