I'm not an attorney but my understanding is yes, you can definitely do that, and I believe things like that happen every day.While I can see some possibilities for why someone would want to set things up that way, I do have the instinctual thought that it might be over complicating things.Technically the second LLC is another layer of asset protection, and maybe you have a very specific entity structure setup for taxes which would make it beneficial to do it that way (an LLC inside an LLC), but it's worth asking the question of whether these is much difference, or much more protection, than just having you (presumably a Mass. resident) be the member of the RI partnership LLC straight-out rather than having your MA LLC be the member.Also, depending on what else you have going on in your MA LLC it may be a disadvantage to have it be a member of the RI LLC from an asset protection perspective - if someone were to be able to pierce the veil of the RI LLC then everything in your MA LLC would be at risk.If you do go with the MA LLC as a member of the RI LLC, when you go to sell the property you'll have non-resident withholding - but you'd have that if you personally were the member of the RI LLC as well.You'll also need to be careful how you sign anything relating to the RI LLC - you'd have to be careful not to sign as member of the RI LLC but as member of your MA LLC, member of the RI LLC.

There were some minor cosmetic things that needed to be taken care of in the empty unit and a couple of the windows outside needed to be properly capped but we could tell that all of the major things were fairly new.

It has a management company that takes care of everything.

The media, courts, tenants, family and friends, feel we are just money hungry people who care nothing about our tenants but only the money.

If my little money pit goes to $650,000, I don't care we will sell in two years, before this entire thing implodes.$300,000 tax free would be way too good to resist then.  

And also they want u to have more skin in the game since it’s not your personal residence.

You have to be careful because most of the time the deposit will not be refundable and most if not all of the properties you have to bid on site unseen.

You may want to be careful if that doesn't settle down in terms of the volcanic activity.

Owner pays for water and sewer, plus lawn/snow care. 

But if I was a new investor, I would be very careful, do you own numbers, and honestly, I would stick with my own financing and contractors.