We're focusing on providing a high-end experience, being pet friendly and leveraging the fact that it's in town to help drive occupancy and ADR.

Unless you are going to be staying at the place, I would leave it as pet friendly.

And no; if you own 50% and your friend owns 50% he qualifies for exclusion on 50% of the sale. 

Any suggestions on the best, user friendly Property management software (PMS) and Accounting Software?    

Listen to your friend.

REI is filled with lots of shiny objects and you will success stories from all these different investing methods and it can be hard to stick to a path.

House hacking means you can use low-down-payment loans (FHA/VA/Conventional) to keep more cash on hand.Network with Investor-Friendly Agents – A good agent who understands house hacking & multi-family investing is a game-changer.

This deal was brought us off-market by a friend.

I'm assuming if this was an option everyone would already be doing it but I am just curious from a professional to understand why this isn't an option.I received a question from a friend that was somewhat similar to mine above which got me thinking. 

Quote from @Kyle Byrd: Any investor-friendly lender and/or agent recommendations in this area?