Even if you took him to court, you'd lose.

If you take the time to gain clarity on those items, you should get a pretty good handle on what your experience is going to be like.The purpose of investing passively is to leverage the sponsor's time, expertise, and ability to source great deals, but if the experience is going to cause you to lose sleep at night, any return you might make simply will not be worth it.All the best,Jack

@Dave Spooner I think people may be leaving the Northeast for a few reasons:Harsh winters, since temperatures and snow can be intense in the region.Job availability is another factor since many companies are avoiding the region.The Northeast is also home to many cities with a high cost of living, making housing affordability challenging, especially as people lose their jobs.

Not only will you gain instant access to many thousands of dollars, but if you use the HELOC as your checking account you'll also pay off your house in a few short years, not decades later.HELOCs cost you less than REFIs.HELOCs charge interest on used balance; REFIs charge interest on every dollar you have access to.HELOCs can replace emergency savings, meaning, you can keep that 15k as interest-sheltering equity in the HELOC.You can't lose with a HELOC.

You will also lose any appreciation that the house will create in the future while the tenants pay down the mortgage and inflation hits.

Because the lender isn't a priority lienholder, it will lose its interest in the property if either of these things occur.

Better to lose $250 than an extra months rent. 

How much weight should we put on being the two people bringing the down payment? 

My house would be locked up to the LLC and I believe I could possibly lose it if I was in the wrong for something.

You will lose a high percent of your potential profits, if you can make any profit, at all, due to management costs and inefficiencies.