For lien-focused investing, a trust is sufficient
If your strategy is to purchase liens for interest and penalty income, and to be paid out at redemption or foreclosure rather than take title, the IRA Trust or Solo 401(k) trust handles the entire process cleanly. You register for auctions, bid, pay, and receive redemption proceeds all through the trust account. No additional entity layer is needed.
When an LLC makes sense
Real property carries liability. If your plan takes title to a property through a tax deed purchase or a lien that proceeds to foreclosure, an LLC provides meaningful protection. Title vests in the LLC, shielding other plan assets from any claim arising from that property. If holding property is a possible outcome of your strategy, form the LLC before that outcome occurs.