Investing in single/multi family homes
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A partnership and a domestic LLC refer to two different characteristics of an LLC. The partnership part refers to you and your sister being partners in the company. As a partnership, you will have to file Articles of Incorporation as well as an operating agreement that details how exactly the partnership will work (is it 50-50, 70-30, etc.), what the division of responsibilities will be (who manages day-to-day operations, who gets to make major and minor decisions, etc.), and how profits will be divided. Make sure you do this properly- there are some standard operating agreements available for free or cheap online (e.g. through RocketLawyer), or any business attorney can draw one up for a reasonable fee (usually a couple hundred dollars).
"Domestic" LLC simply means that your LLC is registered in the state in which you are doing business. The opposite is a "foreign" LLC which is registered in another state but doing business in your state. If you plan on doing business in your own state (MI), then you are a domestic LLC in MI. If you start doing business in Ohio, for example, then you would register in Ohio as a foreign LLC. Hope this helps.