The sell now price is substantially higher than the capital account value we would start out with but would allow us to get into multifamily. 

A couple months ago I was looking at a triplex that came up for sale in a close suburb,   long story short despite suffering from long term poor management, needing substantial exterior repairs, and having damage and 2 vacant and gutted units left over from tenants-from-hell it ended up selling to somebody else for 30% over asking,  needing another 20% of the asking price (at least) in repairs.  

The market rent has increased over $100/month but we raise our continued tenants less than that but the value adds have had rent increase so substantial that overall our rents are up over $100/month per unit for each of the last 5 years. 

Merely substantially differing applicants when it comes to their "stats".  

I would never feel comfortable unless I had substantial reserves.

Write-offs, knowledge to lower my taxes substantially, write-off's you don't commonly think of, things like "paying your kids 12k a year", and "using 'vacations' as 'team building' exercises for said employees, etc.3.

I feel that entering projects with the goal of value add and selling would be the quickest way to build substantial cash.

Second, lenders usually want you to have substantial reserves when investing in real estate. 

They'll want you to have a substantial equity/ down payment, much more than Fannie/Freddie lenders will require.

When you create an operating agreement there are some limits to what you can do but you could allocate him all depreciation in any given year and it would hold up as long as your agreements met the substantial economic effect rules.