Now obviously you can be sued in civil court by the folks you are managing for and the court would be very inclined to look favorably toward the owners.

Managing civil engineers, architects, lenders, raising equity, etc. are all major parts of the development process. 

@Renee JanowskiWithout a license you are opening yourself up to charges of unlicensed real estate brokering, and worse civil liability should a buyer be dissatisfied.Often, states will have reciprocality for licensees with other states.

Does the sponsor have a criminal record or civil judgment on mishandling investor-money?

If you set up an llc with your brother in Florida as the trustee and use your South Carolina llc as a beneficiary and take title of property in a land trust in Georgia ..you could have three state case laws that a lawyer would have to litigate and fully be versed on to attempt to even bring a suit against your property !

If you want to own rental property in your own name, if and when you run into a litigation situation, ALL of your personal assets could be lost. 

You want insurance because they have the lawyers to litigate and pay the settlement.

There's the time/value of money thing to consider, as well the time spent litigating vs. the time spent making an investment profitable.  

The house was abandoned and smothered by a just under 60k healthcare lien and extensive litigation from unpaid nursing with the now deceased owner.  

Property management is one of the  most litigated categories out there for claims.Construction for development is usually second.There is a form you fill out when E & O policy is quoted.