An LLC offers every bit the protection from personal liability as does an S Corp provided accurate books and records are kept and they are treated as separate entities....no commingling of personal funds.
There are good reasons NOT to use an S Corp instead of an LLC for rental property and one of those involves passive activity losses.
Anyway, there is a reason the "Ls" in LLC stand for LIMITED LIABILITY......they can be successfully used to protect personal assets.
One other thing is that the bank.....lender....CANNOT prevent owners from transferring legal ownership to their properties. All that takes is for the owners to record something like a quitclaim deed at the recorder's or clerk's office.....the lender won't even know about it. It could violate the due on sale clause in the mortgage doc but you don't need permission from the lender to do a transfer......you're still liable for repayment anyway and the mortgage lien is still valid so they can foreclose if necessary.
