A realtor that is also a friend proposed a partnership in ...

This is a tough question to answer in a paragraph or two to be honest. If you were coming to our law office in Indiana, we would want to review everything that you have as far as paperwork. I highly suspect that the whole partnership "pitch" from your buddy was merely a ploy for him to be able to refinance the condo and to get a little walking around money. I suspect he was having financial problems and was unable to make the payments easily on the condo. Your refinance likely lowered the payments or provided some much needed immediate cash.

Once I had reviewed all the documents, I would likely suggest that we consider dissolving the partnership and liquidating all of the assets. The pie in the sky projections or profit are never going to come and I fear he's going to take you for an even further journey down the "pea patch" if you don't dissolve the parternship. As part of the dissolution process, we would also want to get an accounting of all partnership dealings. Partners owe a fiduciary duty to one another in Indiana and I suspect the partnership is not collecting any income from your partner and his wife living in the condo. With a full accounting, we would hopefully be in a better position to figure out how much trouble we have really gotten ourselves into.

I wish I could offer you a magic bullet to get you out of this one without the need to incur attorney's fees. But I cannot. I am a BSU graduate for my undergrad and am familiar with the Muncie area. If you need a referral to an attorney in your area, let me know and I will PM some names to you.

Best wishes and good luck.