Being polish she had all her contractors do work and have the place running.

Lance Nailed it.The way it's structured right now you'd only qualify for a $250k primary exclusion when sold vs. the normal married $500k.

Ryan nailed it with both his confusion and his explanation.The "cash" into a deal can be several things... it can be the purchase price (if buying in cash), it can be the down payment (if financing), it can be closing costs (if not paid for by the seller), it can be repair costs (if required and not rolled into the mortgage), it can be back taxes or other cash expended to close the deal... whatever it is.The denominator (bottom number) in your CoC return is quite simply the sum of every single dollar you have sunk into the property to get the rental stream started.

@John Cimino hit the nail in the head.  

You will find brand new people to the game and those that have been polished with years of experience, both good and bad.

Everyone needs to understand that there are enough laws out there to nail anyone if the powers to be want you nailed, there really isn't some unique law or regulation that will be avoided the same way for multiple operators, your case will always be different.Walking a thin line is a risk assessment, the parties involved, the intent of the parties, their financial position,  and experience, what is customary in your area, political views and opinions of your local courts, the degree of a violation, the public harm at risk, if any losses were suffered and other implications of you following some loophole.

Other than the emotionally uncomfortable experience you told us that you encountered during their entire process, you don't seem to have nailed down real specific ssues that you can caution someone to beware of.

Yes, insurers fight tooth and nail, but there's still a percentage of suits which yield a settlement.Professional litigants and their lawyers know the expense associated with going up against an entity structure and even the worst shysters tend to avoid it.

@Matt Horwitz nailed it.

Makes the turnover process in between tenants easier for light touchups/ nail hole cover ups.