Yes we also profit from property management so nothing her out of the ordinary. 

I'll try to explain the various levels of participation and how you can take passive losses against ordinary income.Under Section 469, an activity is classified as passive if the activity is a trade or business activity in which the taxpayer does not materially participate during the year or a rental activity.Section 469(i)(1) permits certain taxpayers who actively participate in rental real estate activity to deduct up to $25,000 of losses arising from the rental real estate activity, if the taxpayer cannot meet the material participation test required to be categorized as a real estate professional.The $25,000 permitted loss is reduced by 50% of the taxpayer's adjusted gross income (AGI) in excess of $100,000.

You may risk having your investment (rental) income taxed as ordinary income.I think 50/50 sounds good if one is a silent partner but another option could be just for the person doing the work to be paid the same way a GC would be paid

Depending on which legal entity you use to conduct your wholesaling, you may have to pay extra self employment taxes on top of ordinary income taxes.(2) I put together a great YouTube video a while back to answer this exact question.

It's not quite that simple, b/c you need to factor the ordinary tax hit (regardless of whether the earnings were ordinary, LT cap gains, dividends, etc.) of the distributions you'll eventually take.    

Tenant agrees that upon expiration of the term of this lease, or upon the earlier termination of the lease for any cause, Tenant will at once peacefully surrender and deliver the Leased Premises together with all improvements thereon to Landlord in the same condition as received, ordinary wear and tear excepted.15.

Yes, looking over the laws for KS, it just mentions some items that fall under ordinary wear and tear and excessive damage and filth.

You'll pay ordinary income, probably self employment, and ACA surcharge tax - could be 40%.If your intent is to hold it for productive use then you can 1031 and the tax is deferred into the next property.If your intent is to live in it and you satisfy the residency requirements of 2 years residence out of the 5 year period prior to sale then you get the 250/500K tax free option.Each one has their uses.  

I've also heard of people making a "balloon" payment at the end of the term instead, do either of you know if that is more out of the ordinary?

I could have taken the money and run BUT I knew the power of wealth building buy and hold real estate.Had I taken the 10K, it would have been ordinary income taxed at the highest level and I would not make another dime on the property.