I lnow that one of my lenders will allow me to refi as a buisness loan (must have some form of corporate structure( C-corp, S-corp, LLC)  as long as the rents is $1 over the debt service of the loan. 

Assuming the stairs and decks are structurally sound and safe you have no liability.

@Bobby Shell reinvest those funds!

To keep the details simple, I acquired 7 acres of land (for an insanely cheap price) with only one structure (a house with tenants who are permanently vacating the property in a few weeks).

I was walking in Jersey City today and there was this shell of a building of central ave I believe.

This way, the partner wouldn't have to shell out an insane $200,000 for a down payment.

Our first intuition was to get an LLC but we no longer thinks it makes sense for the following reasons:- Have to get commercial loans instead of residential, which have much higher interest rates- Have to get homeowners' and umbrella insurance anyway - we feel the risk of being sued while owning rental properties is lower than running other types of businesses if we don't cut corners on the rehab and have a good property manager - Large amount of filing and annual fees requiredAre we thinking about this correctly and is there another structure that would best suit us?

The good news is there are legal structures that can be put in place to eliminate the possibility of losing big in that case, even if insurance won't do the trick.

It's probably for the best to start practicing business structures (even if not required at that point) as the dollar cost of having it is very low

He wins, you not so much.I guess it really just depends on how you structure it and how he gets compensated.Everybody on your team, and your partners in particular, have to be rowing in the same direction, and that means you all (as in all y'all) need to have a financial interest in making sure it gets done on time and on budget.