The reality is, as with any new business venture, the vast majority will fail within 5 years.Most are not fully educated and will make simple mistakes that will lead to selling at a loss in many cases.

Fannie and Freddie took only minuscule losses during the recession on their multifamily products and their current offerings continue to have excellent terms.  

For people traveling through the southern most counties, it is clear that there really isn't much of an economic recovery. 2019 Proj Total Housing 546,9665.18%2014 Proj Total Housing 520,0092010 Census Total Housing 442,2112010 Census Occupied Housing 389,06488%2010 Census Vacant Housing 53,14712%2014 Est Median Value of Owner Occupied Housing 103,5852014 Est Median Gross Rent 6902014 Est Owner Occupied Housing 268,89862%2014 Est Renter Occupied Housing 166,97438%2014 Est Owner Occupied Housing Vacancy 2.44%2014 Est Renter Occupied Housing Vacancy 8.07%2010 Census Total Households 495,358The biggest employment sources are: government, manufacturing, health care, retail trade, and accomodation/food service.

And he needs to seriously get on a budget...a monthly, written budget.If he purchased this as a flip, he needs to just get out of this deal and sell...probably at a loss.

I see a series LLC as a way to avoid getting sued; and an umbrella policy as a way to limit your losses once you do get sued. 

As soon as they stop paying, you at even more of a loss on top of eviction and cleanup costs, and the next tenant pays the manager a leasing fee all over again.  

We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses. 

Just wait when these out of state investors try to sell...any cash flow will likely be wiped out and many are stuck with that reality of taking a loss eventually.

You'll have to recapture it if and when you sell, but it's merely a loss on paper and can bring you back in the black in a case like this, so you likely wont lose money.  

Every additional partner is a potential element of shade and further loss of control.Good luck, Alex.