How would this be accounted for for general accounting and taxes?  

You are being very conservative to avoid making mistakes, and that is a rare, admirable quality in real estate that is often undervalued. 

So, we avoid this by using the customer feature.

I’m looking for mentorship from other investors in this forum to help me identify deals, help avoid common pitfalls and learn from failures. 

Consider using an FHA loan to secure a 1–4 unit property with just 3.5% down and take advantage of tax benefits by living there for at least two years.

To avoid going through the same poor experience, keep reading.Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.It's often a case of not doing enough research, as they don't know what they don't know!

There may be something called a "Due On Sale" clause.Check and see if all tax parcels are included in one mortgage or if they have separate mortgages.You have to have him spell out what he considers to be a "partial seller financing".

(Also, I would avoid giving legal advice to tenant applicants, unless you are also an attorney.)

How do we minimize taxes on the profit we're making on this first home? 

I would reinvest in a another property and use a 1031 exchange to detour taxes.