Determining whether the venture falls under a service or rental business hinges on the provision of substantial services; for instance, if a bed and breakfast service is offered, it must be reported on Schedule C, triggering a 15.3% self-employment tax.Moreover, personal use plays a crucial role in the classification of the property.

Finding the right agent and PM plays a big role.

It might just mean your buyer exercises the contingency and exits the deal. 

Hi @Andrew Orr, depending on your goals of taking an active or passive role with your real estate investments, if you're an accredited investor you might consider investment into DSTs.

Also if i am able to do that, what if eventually the tenant wants to exercise their option to buy, will they pay me in full and then i pay the person i leased from??

I'm not sure what role a PM would play in this scenario.   

For the partnership, it's one thing to split profits and proceeds 50/50, but the work will never be exactly 50/50 so you have to be clear on roles and responsibilities. 

@Eric SmithIn theory, you are right about the role of the PM. 

Here is a blog where I wrote about a recent 42 unit we bought and did creative things to add value. https://www.biggerpockets.com/renewsblog/bought-multi-million-dollar-apartment-complex-age-26/Just a few ways to produce ancillary income:- Laundry Coin laundryDetergent/laundry essentials in a vending machine in the common area laundry rooms.Rent individual W/D to each unit-Parking Garage parkingCovered parkingprime spot parkingJust plain old charge for parking-Renovations Interior units upgradesCommon area renovationExterior upgrades for curb appeal-Vending machines In common areas such as exercise room, pool house, laundry or leasing office-Trash pick up service In high-end buildings they have a service where you can set trash outside your door and for a fee maintenance will go around each night and collect it so the resident doesn't have to carry it to the dumpster.

If you take a more passive role, you will still amass a great rental portfolio with a little less risk.If you take the active approach then I suggest you have a competent partner or mentor, and assemble the right team in the markets you considered.In the meantime, and as always, continue to educate yourself.