From my understanding an LLC would essentially create a corporate veil and restrict my taxation to up to 35%.

They make their money on these fees and rarely ever fund a loan.2) you sent an ill advised "up front" fee to a lender that does actually lend, but the type of loan you wanted is not available to LLC's (conventional loan) or your LLC doesn't qualify, or as mentioned the LLC doesn't own the property.Legitimate lenders don't have an up front fee just for "starting the paper work".3) you paid for an appraisal and maybe title work, before they found out you/your LLC doesn't qualify or they don't lend to LLC's (conventional loan).

If you are talking about taking an investor loan to purchase the property and then later moving into it, I think you are taking some chances.Investor loans do not require all the paperwork required by the Dodd-Frank rules on homeowner loans.  

It is a hassle for them to take you to court...a lot of paperwork.  

I've made a decent living over my brief investing career in Austin, but I've warned many out of state investors to the same thing that @Jay Hinrichs mentioned, which is that we have no state income tax here, which means that our property taxes are astronomical to make up for it.If you live here, it's immaterial, but if you live in a state with income tax, you're essentially getting taxed twice (and yes, I'm aware of (some) of the complexities of cross-state earnings and how they're taxed).

Having the right broker support that aligns with what you are trying to achieve is essential.

At the moment, I am essentially writing out a business plan detailing the entire process so as to make the process as smooth as possible. 

In our area we use a 1031 service the buyer needs to sign paperwork.

They're essentially contributing the duplex to the partnership 

In the future if I keep adding to that portfolio of properties I could essentially use the equity in there to lend against.