But I would remain open to long-term rental as an option as this seems like a more stable option in terms of income, again this may be my inexperience talking.However, I have always  been somewhat risk averse and investing in real estate is always a big venture, in my opinion/experience, in terms of capital.

Being a NYC resident (originally from Long Island), the price of entry in the area is on the higher end, so I've been considering some options in the NY Capitol region, as well as NJ and CT.

Perhaps if your partner was a general contractor or handyman type there may be some merit there to reduce costs / increase profitability.If your partner enjoys deal sourcing, a better move might be for him to become an agent - so he could legally collect commissions from finding deals and managing properties for multiple people. 

I feel like these are my only options:- House Hack: Would I still need to pay the 6% tax rate if I'm getting rental property insurance?

This requires a dedicated effort sourcing and analyzing hundreds of deals to find the one or two worth pursuing.  

I don't have a lot of confidence that those numbers are true (10 DOSC for him, a few dozen for his students), considering the source. 

I have considered turnkey properties as an option

@Max Bellino For smaller properties like your 2–4 unit multifamily buildings, an online cost segregation study is a quicker and more cost-effective option, providing sufficient accuracy for straightforward properties.

Homewrite is seems like it could be a good option.

I have the option of turning it into an S corporation.