I suppose it's possible to be sued for more, but I can't possibly think of too many things involved with my rentals that could make me personally liable for such an amount, especially with the weight of the insurance company's law firm fighting on my behalf.

The partnership membership will share profit, loss and so-forth.

Reason I ask is because what would happen in the event that after the LC was executed, the tenants were to completely trash the property (or some other scenario causing extreme property damage) and the expenses to repair would be so high that it would not make any financial sense to repair and re-rent out, and so the new owner decided to cut their losses and strategically default? 

Personally, I'm curious whether you have a property lined up for this and any details on the financing... are you expecting the 'students' to participate in the financial weight and benefit or just looking for hands-on flippers to mentor?

I'll tell you right now that some managers charge fees without producing results and others are worth their weight in gold.

The reason I ask, is that the more rental properties your acquire, the more likely one of them will eventually have a temporary large financial loss.  

Cash was king and many deals were suffering from a equity loss due to the financial markets.

Since you are lowest on the capital stack you are in first loss position.How fast you have to make a decision on this is also key.

Some contracts are being abandoned and obviously that creates some fines and losses.

I know most HML's are pretty strict with there lending policies though (Usually 65-70% of ARV max) Being an agent, you have a little extra weight in that you should be well versed on all aspects of determining values, which also helps.