If you have 2 properties in one LLC and you have a lawsuit, they can take both properties. 

So, as an investor, you are dealing with a very different type of seller.Combine the inexactness of the true value of a probate inheritance with the inmate "victim mentality" and you've got a potentially big lawsuit waiting for you at some point.

Even if you don't do this, having a LLC doesn't automatically protect you from lawsuits.

Reason is, that there are other events in life where that loan may be viewed under other legal requirements, in qualification for benefits, asset determinations, estate issues, law suits and other messes where a funny money loan cab be brought back or discounted with adverse effects if it is not made at arm's length.

depending on the buildings age lead paint would be my main concern ...that & mold is getting a lot of press up here with lawsuits against landlords even after they have had independent testing !!!

As for the LLC and corporate veil, I'm not worrying too much on the creditor/debt law suit, but more toward the potential law suit from renter (been reading a lot of freaky renter stories).

Do everything professionally and you don't have to worry about "Testers" and "Lawsuits" Get that Criteria typed up, make sure it's legal, and make sure it's visible for all applicants to see.

There is an ongoing lawsuit between the family and the power company.

In the states one lawsuit could be very detrimental to your entire portfolio.

If the only reason you don't want to rent to him is because he's a sheriff, you are setting yourself up for a lawsuit, and rightfully so.