Remember this - everyone on BP is responding to your request for help. In your case, you have so many issues at the same time, and it requires multiple professionals to assist you to make your life run smoothly, and in the end, more profitably. That said, all I can do is respond as a serious investor would, without legal or accounting advise, but hopefully help you see what others would do in your situation. I hope this helps open your eyes that not everything is lost - and can be fixed - with the right help.
You said you have three rentals, paid in full? I assume this means you have no liens on the homes, and your equity is sitting in each property? These three homes are in your name only? Also- you need the rental income to pay your bills? This raises a number of red flags to me.
1. Rentals in your own name can equal disaster. Period. Never put rentals in your name. You mentioned you have insurance. Enough insurance? How much is enough? Do you have an umbrella insurance policy over you personally - in case you are sued - and they try and take all your assets? See where I'm going with this? You mentioned something about being sued, and want the rentals in your name? You think insurance will protect you? Maybe yes- maybe no. Have you seen how large insurance coverage documents are? Most of the pages are for exclusions. Please see an insurance expert - or call the company. I was sued 10 years ago - not my fault. Insurance covered everything - even settled out of court - just to make the suit go away. Lawsuits happen for no reason everyday - you must be over prepared. In my case- the wife fell down the stairs three days after moving in. Somehow- my fault. House was 4 years old at the time. Strange events happen. Landlords are targets.
2. You heard that LLC's do not protect against liability? Maybe if they are set up wrong, or not run as if they are "alive" ( annual company minutes written down, annual fees paid to the state on time, separate bank accounts, etc). They exist only as "Limited Liability" companies - just as the name suggests. To think otherwise- is wrong. Period. You need to speak to either a corporate lawyer specializing in company law - or a good CPA accountant asap.
3. How to pay for the above? You own free and clear rentals? Go to a local bank ( or multiple banks) and see who will offer you a line of credit that you can draw from. They will attach a lien to your rental house (for each one). At this point, any size will help, but try and get as large of a line as possible - on each house. I will explain shortly. Take a small amount and use it for legal and accounting advise to set you up for tax advantages, asset shielding, etc. The meetings will not cost nearly as much as what you can lose in a lawsuit.
4. Why these lines of credit? Two reasons.
1. Banks will "grab" as much equity out of each home as possible ( up to their limit of course). When you are sued- a lawyer will look to what you own to take as much as he can. When he sees a home with a large mortgage, line of credit, etc - that a bank has a 1st position on- he cannot take any of it - only what is left after the lien, if any at all. So- this works like an asset protection device - in the loosest sense of the term. Nobody can tell if your $50K line of credit lien on the house is all used up- or nothing is used at all. See what I mean? It stays there until you sell the home- or refinance with someone else.
2. Access to a few dollars to get you out of this mess. Once done, and you are set up properly, I would suggest to either burn the checks - so you cannot load up on debt on these lines of credit, or if you feel confident, use these lines to buy a low priced rental - and this will be your financing for it. The interest rate will be extremely low compared to investment money ( they average 3-4-5% interest today). Just don't abuse it.
That's my long two cents. Take what you want from it. Experts will advice you best.
