@Kenneth Johnson,You actually want an entity structure to provide better isolation and protection.

Full insurance coverage, which you need anyway, will protect you the same as having a LLC.

It is a super easy read and explains what the best options are for real estate asset protection and why.

To be fair to your Seller though, she may want to have an attorney draw up the Promissory Note to assure her interests as a Lender are protected.  

An ironclad contract should protect your interests in the event things do not go as planned.

As others have said, the only reason to need an NDA on a SFR is because the party allegedly selling the property doesn't have it under contract and wants to protect themselves from a smarter investor who will actually get the property under contract so he/she has something to sell. 

We appreciate in advance any advice folks might have on how we could proceed with this deal while protecting ourselves. 

The lenders are much more careful these days and most will limit the LTV at around 75% to protect themselves.  

The delinquent taxes are being paid by somebody whether it is the bank to protect their interest, heirs or a tax lien certificate investor.

I'm just more curious if others have run into this as a common theme or if there is anything special I should do to protect myself with other tenants who may opt to do this.