However, it's a great way to achieve STR esq cashflow without having to purchase assets that have a $250K+ pricetag. 

And, you need to cure your liability (you cannot use a city easement without obtaining a Grant of Easement from the city - a legal document to be filed with the Clerk of Court).You've done everything you can to mitigate the damage to your home and I applaud you for it.

This could be a great cash-flowing asset but you're also assuming a lot more risk with this structure.

Plus you should hold assets going into inflation.

Selling one of the properties is not an option because they were both purchased via 1031 funds from dramatically appreciated assets creating a cost basis of next to nothing on these. 

Balance Sheet shows all Assets, Liability, and Equity.

HI Vince, as long as you are vacating your current primary home and moving into a new primary that is acceptable, but just make sure you obtain a 12 month lease in order to use the rental income to offset your mortgage payment and not getting hit twice for your current mortgage and new mortgage.

Keep an eye on the STR regulations, and as you progress, consider diversifying your portfolio with other asset classes like commercial or single-family rentals for added stability.

Structuring the Deal with a PartnerWhile your partner cannot directly participate in the loan, there are ways to structure your arrangement to reflect your 50/50 partnership:Option 1: Post-Purchase Equity SaleYou obtain the 203(k) loan in your name as the owner-occupant.After closing, you sell your partner 50% equity in the property via a quitclaim deed or similar legal instrument.Your partnership agreement would outline each person’s roles, responsibilities, and share of profits.Note: Be mindful of FHA’s rules around title changes and ensure this doesn’t violate loan terms.Option 2: Partnership Contribution AgreementYou both contribute to the down payment and renovation costs as outlined in a partnership agreement.Your partner’s contribution could be recognized as a share of the equity in exchange for funding, services, or property management.The partnership agreement would detail how profits, responsibilities, and equity are split.Option 3: Joint Venture AgreementStructure the deal as a joint venture, where you own the property personally (required for the FHA loan), but profits and roles are split per a formal agreement.Your partner could receive equity-like compensation through profit-sharing without being on the title.3.

$1,200,000 purchase price and the balance for closing costs, repairs and reserves.There are ways to obtain financing in Mexico, but most sellers are expecting cash deals.