We've been working with both tenants and we're trying to calm things down.

Have a frank heart-to-heart and stay calm, even if he gets mad.

For deal sponsors, what kind of waterfall do you typically underwrite your deals with - American or European? 

Should I wait till the market calms and get house #2 then?

I have always, even through busy seasons, felt that it would eventually calm down and be manageable again.

The capital investors usually really appreciate said flexibility (e.g. waterfall allocations or a preferred return).It's best to work with a business attorney and a tax advisor who has experience drafting the tax related portions of a operating/partnership agreement to achieve your goals and to ensure that the tax positions taken on the returns are respected by the IRS.

The PM contact also stated something very unprofessional, i.e. calm down I have done this for 20 years, I am just telling you the law. 

Anyway, I saw a Lorex 8 camera NVR system today at the costco and thought that would calm down some nerves but I know me and it's going to really make me angry and stressed constantly because my tenants are inept and would be breaking a new house rule every other day, smoking indoors, bungee jumping off the roof, throwing firecrackers at cars, urinating in the front yard while spinning in circles etc and I'd be right there at the camera watching it and letting my blood pressure go through the roof, also I would be on the only house on the block with cameras and the police would be hitting me up nonstop every time another house on the block was broken into asking for footage because none of the other landlords here want cameras for the exact same reason.

You said 6-8% - is there a waterfall for express distributions?

Head for Whitefish Bay before the storm hits.Wait too long and join the crew of the EFJ in Davy Jones Locker.You can't operate in a storm in the same way you operate in calm seas.Just my 2 cents.https://www.youtube.com/watch?