You'll have tenants that don't pay, damages made, and potentially other disasterous situations occur on your properties. 

I'm looking at investing in several out-of-state markets (potential BRRRR strategy in mind), I have a list of qualifiers that I'm sussing out to determine viable markets but would love to know: what data helps in determining a good market to invest?

If you have a potential tenant that "might not" be a good payer, just don't sign a lease. 

To qualify for active treatment and unlock potential tax savings, you must meet the material participation rules outlined by the IRS.

And before getting too far along in the process it might be worth doing a title search to check on any potential liens on the property.

Additionally, your brother would inherit your cost basis for the gifted portion, potentially leading to higher capital gains taxes if he sells later.

It's the conclusion you came to before you wrote the post I know but bringing up the challenges might make you realize that you might have to offer a heck of a good deal to attract a potential partner.

There are times when we see deals on the table that won't produce any cashflow or not enough cashflow to meet our target hurdle rate but the tax benefits or appreciation potential may make the deal attractive. 

In the next few years, there's going to be so much appreciation potential that it's going to absolutely blow up Columbus.

I highly doubt Paces team does anything more than sell you his system.. no way they are vetting potential borrowers of small EM deposits  :)  many beginning wholesalers do wholesaling because they have no money or credit or credit is tarnished etc.. this is ultra high risk en devour to be loaning money like this to people you are meeting on line..