Your code is quite messy...

Anyways:

<?php
    foreach($posts as $post){//loop trough posts
        if ($logged_in){//check if the user is logged in
            if(!empty($post['Favorite'])){//check if favorites is
empty
                $flag = 0;//initialize flag
                foreach($post['Favorite'] as $favorite){ //loop trough
favorites
                    if ($favorite['user_id'] == $current_user['id'])//
if logged in user id is in favorites, increment flag
                        $flag += 1;
                }
                echo $favorite = $flag == 0 ? 'BUTTON TO ADD TO
FAVORITES' : 'ITS YOUR FAVORITE';//echo the corresponding link
            } else {//Favorites is empty
                /*****BUTTON TO ADD TO FAVORITES******/
            }
        } else {//User is not logged in
            // No logged in user. Display link to describe what
favorites are
        }
    }
?>

Hope this helps...

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