There maybe liabilities or lawsuits that you are unaware of.

Operating expenses include taxes, insurance, management, maintenance, vacancy allowance, entity maintenance, legal fees, evictions, court costs, advertising expenses, lawsuits, office supplies, damage done by the tenants (above the deposit) and capital expenses (which are included in the 45% to 50% number but are not technically operating expenses) etc, etc, etc (all the things that happen in the real world).Mike

Personally, I think this is bad advice...Even if the renovation appears safe, if something happens that causes injury to a tenant or a tenant's property, you will open yourself up to a PERSONAL lawsuit.Now, of course, anyone can sue you at anytime and for any reason, but that's why you should have a legal corporate entity that will limit your liability in the case of a lawsuit.

end up buying some lawsuit squatter house that I cant even get title on.

Then I'm vulnerable to lawsuits.

With that said all of our disclosures are in place because at one time or another there has been a lawsuit involving them.

Especially if you get into REI full-time, there's always the potential for a lawsuit, or other legal expenses, and it's best to minimize the risk of those things hurting you where they don't have to from the very start. 

I have an 8600 SF home that already has an in-law suite of 1100SF.  

Plus if you ever end up in lawsuit and you are not properly registered as a contractor, you are pretty much screwed and can't do much as a plaintiff or defendant.Also something to consider about a "sale to yourself" is the Excise tax you have to pay when you sell a property.

Equity is a lawsuit magnet.You will get both sides however you will likely not hear from anyone that has actually been protected from a suite by having a LLC protected their assets.