My understanding is that an LLC forms another layer of protection for your personal assets.

Do it in a gentle way.There is no good way to protect your position other than get the deal under contract.

My next in line to read is a book that REI suggested in a separate thread, "Wealth Protection Secrets of a Millionaire Real Estate Investor" :groovy:

There has to be a balance between asset protection and the costs.

I say its all about protection.

Hi guys,I tried to look for an answer through the search but could not find one.Here is the scenario.We are family members.We have a total combined equity of 100KWe are looking to buy Apt buildings 20 or more units per Apt complex.2 of the members have excellent credit1 of the members has poor credit but good equity( which we may need to use for down payment).How do I set up a company in order to protect everyone?

They can be low and they can be high but at least you have a professional giving you a value while protecting their client--the bank.

And if so, how am I protected so that if they were to default on the contract I would be able to take action?

Title to property is protected from things like Tax liens, Judgments, divorces, death, and other "life problems" that people get themselves into.

John, I'm guessing you are looking at protecting your contract, and in that case "recording" it with a title company will do little unless another investor is closing with the same title company.