Below is my opinion. I do not have much experience with what you are trying to do. Hope other people comment on this.
I guess that if you sell the house to an LLP, you would have actually to sell the house, in which case the LLP would have to buy it. If your friend has some money you can sell it to him for the $47K what you owe the bank and you would move the house into the LLP. This probably does not help you get where you want to be. I doubt the LLP since there is nothing in it yet, would be able to get a loan with any bank to buy the house from you. I am not sure that would help your tax return if you sell the house for a low dollar amount.
I know that LLP's are used to shield partners from liability. This way if one partner is doing something wrong the other partner is not liable. I have only used LLC's. I know there are different rules regarding control of the business with LLP's. I think you could be part of an LLP and essentially have no control over it, but you are protected if the people with control do something wrong. I heard these are used when people want to invest, but for tax purposes, they need to be partners. This way they have the tax benefits of the partnership without the liability. Read this guys book (Tom Wheelwright - "Tax-Free Wealth).
I would have an operating agreement with your partner about the house / business, who owns what, and who is responsible for what. I would deed the house to the LLP. I know you can do this with a quitclaim, but I do not think it is that easy. The mortgage company will not necessarily let you assign the mortgage that you took out to a new entity. I have only looked at doing this with an LLC, so I do not know if it the same with and LLP. You could do a quitclaim your friend on to the deed of the house, so he has half the equity in the house and start the LLP up separately with his capital.
