The penalties are just too high. 

Is this normal cost or high?

I would highly recommend you create an LP agreement.

He has been alongside me on the other deals so I’d like to give him equity/skin in the game and I don’t know how else to do itQuote from @Basit Siddiqi: Getting a property with a partner / friend will not help you from getting hosed on taxes.I wouldn't move forward - You mentioned beng a high income earner so your hourly rate is very high.

Budget carefully, prioritize high-ROI renovations, and adhere to strict timelines to maximize profitability.

Looking for high equity growth areas is a bit of a gamble.

Palm Coast might not have the flashy reputation of Miami, but there’s a lot to love in that area’s growth potential.I’ve been around the real estate block for a few decades, and one thing I’ve seen is that luxury rentals can thrive when they’re more than just “pretty”.. they need staying power.

The distributions and allocations on your K1 will dictate what is attributed to you. 

An LLC shields personal assets from business liabilities, while S-Corp taxation allows you to reduce self-employment taxes by taking a reasonable salary and distributing remaining profits as distributions, which aren’t subject to payroll taxes.

BRRRR is such a powerful tool that it makes sense to apply it to single-family homes (SFH) early on, then leverage those skills and capital to take on the other asset classes you mentioned.