The cost is a 'mentor' that goes around you and leaves you nothing because you didn't know how to protect yourself. 

Planning on getting rental #2 and want to be protected against the “slip & fall” and exploring available options.Thanks!!

It may also be a great asset protection tool for those in high-risk professions like doctors.

For 20 years, I have been doing taxes for investors, including hundreds of lenders and borrowers, and I have seen these scenarios too many times.You need to protect yourself in four areas, not necessarily in order of importance:1.

You don’t “foreclose” with an attorney, the tax collector sends it to a public tax deed auction.

In terms of keeping both parties legally protected financially and legally?

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.

Plan for the worst to protect yourself. 

I know it costs a little ....but seems worth the protection it affords.

How close is it to public or school  bus stops?