That's why I would never had a business partner.

I strongly recommend consulting with an employment attorney—search for one in the area where the business is operating.

I'm going off the understanding that you still need to spend 500+ hours in the business to achieve material participation (please correct me if I'm wrong). 

The nice thing about the arbitrage business model, is the companies usually pay you a monthly rent, and then they handle all of the AirBNB stuff. 

My business is built around doing deals for out of state investors and my mind is BLOWN by how many flat out refuse to come visit, meet our staff or walk the property that they bought and we are rehabbing for them.

Of course don't go there just looking for business, you go because you believe in whatever the group is doing. 

Paid 77% of the original list price on this new construction home.

The other is a smaller operation which does a lot of business in the specific neighborhood the house is in.  

I have two phones, one for business and one for personal.

Just be sure to check local zoning rules, manage construction costs, and explore financing options like HELOCs or DSCR loans.