Clear expectations from day one will help you avoid misunderstandings.

It’s fair for the capital partner to handle these financial contributions since they aren’t bringing management or hands-on skills.Whatever structure you choose, make sure all contributions and profit-sharing are clearly outlined in a legal agreement to avoid any potential misunderstandings down the road.

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

@Ashish Acharya thank you for your response, but I feel I'm still missing/misunderstanding something - you said "the IRS allows spouses to combine their time for material participation purposes", followed by " only one of the spouse's hours counts for the REPS status, which means only one of your efforts can count" - which one it is?

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

While the 1% rule would hopefully apply to an investment property, it certainly would not apply to my situation if I kept renting, as I would only be paying ~$1,600.Let me know if I am misunderstanding. 

Framing the idea as a way to preserve and improve the family property (rather than focusing on personal gain) might help avoid misunderstandings.

I have to be misunderstanding something in the BRRR process because people are making this work.Please help!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.