The purchase was structured to ensure both our partner and the seller benefited, allowing for a smooth and timely acquisition.

There are a number of tax strategies which you could benefit from.

However, a common benchmark is aiming for at least 6-8% cash-on-cash return based on your total investment (purchase price + rehab + closing costs).Always factor in appreciation potential, tax benefits, and personal risk tolerance.

Since I focus on cash flow, I already have the benefits afforded to real estate.

The key is structuring the deal in a way that benefits both you and the other party—networking with experienced investors can help!

It's against the law in some jurisdictions (OR, WA, CA and others) to even approach someone in a distressed situation unless you are an attorney, a realtor, or a registered "Distressed Property Counselor" and you can't benefit by buying or wholesaling the property.Equity Skimming and related penalties of sentencing are detailed in 12 United States Code USC Section 1715Z-19.

But in reality, for younger people with moderate income, I actually see less benefit to financial planning.  

I'd recommend looking at costs. your build cost is going to be well over other homes because of the fixed costs like slab, Hvac, roof, etc. check the market drivers and weight the benefits of short term versus long term. long term is no furniture and help pays mortgage but at this size it doesn't really cover everything. we didn't find a lot of economies of scale in single family detached. can you build more than one unit?

Just curious, is there any tax benefit to filing as a regular partnership and issuing k-1s to ourselves that show a loss?

The seller may not want to do this, as many of these guys are benefiting from the tax deferral which comes with NOT moving title over.