What disadvantages will the 40% of shareholders have at this setup?

I travel every week as a consultant, which I’ve always felt was a disadvantage in my greatest desire of meeting up with other link minded individuals, especially those who have seen success with RE.I have zero experience in RE, but I’ve been listening to BP podcast for about a year now and it’s quickly became an (healthy) obsession.

However, I don't want to create a liability for myself by being licensed, and I know another investor here has mentioned that there are some tax disadvantages to holding a license.

I'm not an attorney but my understanding is yes, you can definitely do that, and I believe things like that happen every day.While I can see some possibilities for why someone would want to set things up that way, I do have the instinctual thought that it might be over complicating things.Technically the second LLC is another layer of asset protection, and maybe you have a very specific entity structure setup for taxes which would make it beneficial to do it that way (an LLC inside an LLC), but it's worth asking the question of whether these is much difference, or much more protection, than just having you (presumably a Mass. resident) be the member of the RI partnership LLC straight-out rather than having your MA LLC be the member.Also, depending on what else you have going on in your MA LLC it may be a disadvantage to have it be a member of the RI LLC from an asset protection perspective - if someone were to be able to pierce the veil of the RI LLC then everything in your MA LLC would be at risk.If you do go with the MA LLC as a member of the RI LLC, when you go to sell the property you'll have non-resident withholding - but you'd have that if you personally were the member of the RI LLC as well.You'll also need to be careful how you sign anything relating to the RI LLC - you'd have to be careful not to sign as member of the RI LLC but as member of your MA LLC, member of the RI LLC.

But there are others who are born with different advantages and disadvantages in life, and you just gotta work what you got regardless where you live.Also, moving in for a short time to get a better rate on a loan instead of paying 16% to 3 credit cards IMHO is a good idea.

I'm curious as to what are the advantages and disadvantages to having rental units paid off versus mortgaged?

Are there any disadvantages to not having a lease in effect?

What are the tax advantages/ disadvantages?

This is a big disadvantage to me as we would like to be able to use some of my 457 for living expenses prior to retirement age, yet simultaneously I would like to invest the funds in higher yielding (read self directed) investments. 

I have done a bit of searching about this on here and have not been able to find a consolidated thread on the advantages/disadvantages and protections needed for both parties in the process.The property is unique and I would plan to have it as a long term rental as it provides good cash flow and will be even better if I can add an additional unit as planned.I am looking to possibly do this on a small multi family property.