Mainly, the LLC prevents a loss from spilling over into your other investments or your personal finances in many cases (though not all).

I would rather absorb the loss of rent than deal with any more passive aggressiveness from the current tenants and lose out on good leads as a result of that.I really appreciate each of you for taking the time and clarifying things for me.

Unit 1 will lose this small storage.We settled for $ 250 rebate per month for the loss of this small storage.And $ 700 rebate for the construction.

I made some elections about grouping by not grouping as I expanded and didn't understand the consequences (making material participation easier/when passive losses can be harvested/ease of filing) of that at the time.Also random question but do you have a sister Nicole?

They had issues performing because they didn't underwrite expenses correctly and as a result they ended up carrying alot of debt and losses.

@Bill HamptonNot a cpaBut you should have a profit and loss statement that shows all your profits and losses.

Be sure you and your friend are receiving annual forms 1098 associated with both loans and that you discuss with your respective tax advisors.You will purchase hazard insurance in your name, listing the underlying lienholder as 1st loss payee and your friend as 2nd loss payee.When structuring a wrap, it's best for the wrap term to be longer than the term for the underlying loan and of course the monthly P&I payment to be higher. 

Where the parties to a venture join together capital or services with the intent of conducting a business or enterprise and of sharing the profits and losses from the venture, a partnership (or other business entity) is created.

Jeff,I would suggest another questions/request for info to add to your due-diligence:    "have there been any claims reported to you, submitted to the Insurance carrier, or that you are aware of, during the past 5 years"I would also suggest that you request that they get the "Loss Runs" (report of claims) for the past 5 years from the current owner. 

when she moves out, would it be best to, ask her to replace them with another pair of used machines that work or just take the loss.