That's not only to protect your deposit if you can't find a buyer.

The reason for this is to protect oneself from unknown liability.  

I am fairly new to REI and my investor in this deal is a family member, so I want to make sure that we are both protected and happy with the JV agreement, Not that if this wasn’t a family member that I would treat this any different.

There are ways to provide protection for yourself.

I am not going to type what I think of this.The BestMeeting Nina, the 94 year old woman next door who still drives to the store herself and is very sweetly Texas strong willed who came over to thank me for cleaning up "That mess"Up Next weekLast of the demoDumpster gets filledFramers / FramingElectrical workRough plumbing Earthwork with a Bobcat to protect the house better next time we get a 12" dump and solve the ground water penetration issues.

If interest rates rise in the future the risk may increase.LLC ownership is part of an asset protection strategy. 

Normally, any and all retirement accounts are except from litigation if an individual gets sued, so all of my IRA/pension funds are protected.

It's there to protect your other assets not like normal insurance were it covers you for a certain amount of loss.

I saw Total Protect for one, they are cheaper but I don't know anyone who has had experience with them.

I've seen leases that state in the event of early termination a liquidated damages clause protects the landlord.