A "customer" who turned out to be another owner in the building rented the apartment via AirBnB under a false name and after being there more than 30 days gets legal possession of the rental under SF law and cannot be evicted. 

The idea is that you find the business adequately and consistently treat it as a separate entity, and so long as that's true, it provides you limited personal liability.When it comes time to file your taxes, the IRS says "I don't care about any of that legality mumbo jumbo.  

It may be smart from a legal protection standpoint (and you should definitely discuss this with a qualified attorney), but in terms of taxes, your Schedule E will look exactly the same as if you did not set up a single-member LLC excepting costs that are specific to setting up and running the LLC itself as Tom mentioned above.

Curious if you guys would recommend using a service like a Legal Zoom or is it best to work with a local person in my market?

If inspection report does not say anything, can I assume it is not a legal issue and I can just politely acknowledge their problems without committing anything in return?

Hi all,What kind of legal protection/steps should I seek before buying a possible rental or property? 

Even better, talk to your family & friends to see if any of them have connections in the local legal/real estate world.

The property can easily rent for $1800 a month.I was wondering if there would be a way for me to go into the deal and have it cash flow, pay down the loan without me getting into any legal trouble ?

If it turns out nobody is in there then you can hire a locksmith to get in and change the locks.I wouldn't put any utilities for the property in your name until you figure out who is in there and are able to legally get them out.  

So from a legal stand point, yes it is wrong and probably fraud if you had the intent to not live there 12 months.