There is an owner in default, and there will be a court judgement against him.  

Can you take time off from work and stay in a hotel for a month or two going to court or fixing problems?

For example, if a tenant of that 4-plex sues for falling on the property and wins the court case, they are not able to acquire all your personal assets like your bank account, the equity in your home, and all your other assets because the 4-plex is owned by the LLC.

Investment Info:

Retail commercial investment investment in Chicago.

Cash invested: $400,000

FULLY OPERATIONAL RESTAURANT AND MANAGED BY EIC.

What made you interested in investing in this type ...

The short answer is Judicial (Court Action) the bank can come after the seller for a deficiency in the loan. 

That's really a question for the court to answer but I don't think you'd find many courts sympathetic to the landlord in that question; I can go down to Lowes or Home Depot and have a brand new fridge by tomorrow morning. 

So if he screws you (something I am assuming is likely as I'm picking up he's probably a drug addict or something of that nature) you'll need to evict them through the courts just like any other tenant. 

So even if you pick a state with stronger protections like WY or NV, the cause of action arose in the state where the tenant fell, so likely that the court where the accident happened would have jurisdiction.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so CA residents are covered, and to try to have your contracts fall under the purview of CA courts.

The government is terrible, taxes are high, crime is out of control, credit doesn't exist in tenants, the city looks at you as revenue, you literally can't force someone to pay water, you could only sue them in civil court.

I declare the money on my personal taxes..take deductions...and use the profit to pay my current mortgage.But what if I started an LLC...had my tenants pay that LLC...then took deductions and instead of paying personal taxes and paying my personal mortgage...I instead used the cash flow to pay the mortgage on an investment property.Can I do that thru a one owner LLC?