The structure of that partnership - whether LLC or LP or GP will depend on the level of investment and what you want the nature of the partnership to be.  

It's a mixture of risk tolerance and human nature. 

Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the “cause of action” arose in that state.

In an S corp my understanding is that due to the pass through nature, your own personal property can be dragged into a litigation over a business property.Definitely get a local CPA/Attorney here, better to spend a few dollars and save your butt in 8 months!

However, the nature of that type of investment requires that YOU, the investor, do all the legwork of vetting those investments, and any third-party PM companies or turnkey providers you may be contractually obliged to work with when buying a property from a marketer. 

When talking about emotions and human nature, the math gets thrown out of the window...

I"m guessing that even if he (they) agree to it the nature of your relationship will be changed. 

After expenses/emergency fund, I will have 70,000 to invest in RE generated from my W2 each year.

It's just the nature of the business.... but still frustrates me every time! 

Cash flow + appreciation (natural and forced) will turn that $50k into $100k in a couple of years.