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

Your insights into the importance of a knowledgeable capital partner and the potential of these projects are valuable.

Giving potential partners an option.

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..

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. 

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.

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

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

The formula that is sticking out as a potential to me is what I have been doing quietly the last 6 years: buying a cosmetic SFH fixer in B areas with 3% down, live in and renovate, long term rent and repeat.

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.