@Joe Villeneuve it seems you are operating in an environment I am moving towards. 

Assume your buddy is going to prison and decide if you can operate without him being there for you. 

The goal is to bring together the brightest minds we know regarding syndication, how to replace your income, self directed IRA, how to crowd fund, and advice from private equity and student family operators with well over $100M in assets (both did this in their lifetime with zero inheritance).

Then if you want another degree of separation, you can then create a side traditional operating company that owns no assets but does all your contracting for you.

Your intention would be from the communication that you had when you bought the property, or your communication with your contractor, or documented in your overall business plan or LLC operating agreements and stuff. 

For instance, a 5 cap simply means that if you purchase an apartment building with no financing involved at all, the building will produce a 5% return after your operating expenses.

(Even discussing a home for sale that you don't already own is a license-required activity in MA)Remember that we operate on 100% commission. 

I deal with this issue by creating an operating agreement under which the LLC can function.

@Mindy Jensen where's my virtual cork-board ;-) ), but here are some alternatives to get you started:Douglas Gray's "The Canadian Landlord's Guide" is a good starting volume.Steve Cohen and George Dube's "Legal, Tax and Accounting Strategies for the Canadian Real Estate Investor" is a must-have overview of how you buy, own, and dispose of your real estate and the implications of different strategies.    

How does everyone have their Operating funds held?