Your LLC can be taxed as a sole proprietor and for the LLC to do as intended ("Limit" your "Liability") you must completely separate personal and business expenses, credit card, bank accounts etc etc and obtaining bank financing may be impacted.

His LLC will be the "GP" general partner with my LLC as the limited partner.

@William Danielson the first step is getting a solid property manager who understands your limitations.

In AZ, we are limited to 1.5 times the rental rate. 

Are you also sharing the net income/loss 20/80?

But then again, my trucks are 'beater' work trucks and have fixed functions... diesel tanks on one and just under commercial weight limits (25999) on the other... 

*Provide information about rental rates and other terms and conditions of the rental, as set out in a schedule provided by the owner, and*Accept deposits, fees for credit checks, and other administrative duties, security deposits, and rent*Provide preprinted rental applications and respond to applicants’ inquiries about the application*Show rental units to prospective tenantsAs you can see, a non-licensed, non-resident manager is limited to performing rather routine tasks that don’t call for initiative or decision making.For instance, this manager would not be qualified to negotiate a lease (4), deal with late rents or other violations of the rental agreement or lease (5), or appear in court on your behalf (6).(1) My property manager does NOT live on any of the owners properties.(2) My property manager is unlicensed.(3) My property manager supervises 10 different properties.(4) My property manager has negotiated leases for 12 years without a license.(5) My property manager has dealt with late rents and violations.(6) Unknown

Safe typically entails little to no opportunity for loss.

The adjusted basis for you is the basis that you paused depreciating mentioned earlier. 2) When you converted the rented portion to personal use, there is no gain/loss or depreciation recapture, but when you dispose of the property, both depreciation ( before  personal use and after)  will be recaptured.

I was at the limit at one point, both from the standpoint of slots and DTI.