Then I suppose I'll go down the foreign LLC route since the states I have in mind require a registered agent.

*PS Subject line was supposed to say Capex and Repairs, NOT Taxes.

It seems kind of harsh to stick him with the full bill as if we were renting the whole place out since we are in on the investment together, but at the same time I don't want to have to put in a lot of money for expenses for a place that I'm not living in and he is, especially since its supposed to be an income producing asset.

I don't see any value either way, if you get your license.Many investors would argue that there's negative value to having your license, but I suppose that depends on what your goals are.

And then most importantly, for either route, you want to get a property inspector to verify you're getting what you're supposed to be getting. 

And believe me, we earn every penny.Never accept money above and beyond what the tenant is supposed to be paying. 

From a practical perspective I suppose the question as to what the sponsor would do if they found out, or even if they would find out is a reasonable question. 

Texas is supposedly the cheapest and also has very strong asset protection laws.

One of my clients who owned radio stations had 5 million with us so he made 500 to 700k a year.. these were all performing or were suppose to perform  :)to make the money your talking about 300k a year out of the gate would require a lot of capital upfront.. which most don't have personally ..  

Oh well, I suppose it's more ideal to be able to pounce when opportunity strikes.