She did well in part because she had a decent sphere and she's very good at articulating her value at open houses.

@Melissa Kirchhoff thank you for your insights, you bring up some concerns I hadn't quite been able to articulate.

Like others have stated proving this misinterpretation between you and the PM may be hard to prove in a lawsuit, take a look at how you articulated the ask in your correspondence to the PM, Did you ask for all parties over 18 to be listed on the lease (which it appears they did) or did you ask the PM to qualify and get signatures for all adults over 18 leasing the property? 

I need to be able to articulate the numbers, plan, and execution to gain her buy in.

You can not sell a property that you do not own without a license (realtor etc)This is a little bit of a grey area.You  need to learn the proper way to do this and the proper way to articulate to others what you are doing.Basically you are finding deals.

Two thoughts come immediately to mind:Unless you can articulate in excruciating detail why your friend is so motivated to get away from this property, and then describe in detail your solid plan for addressing all those issues, you will BE your motivated seller friend in a few months/years if you buy this thing.I would aim for buying subject to existing financing (search "subject to" here on BP), rather than via "lease-to-own" or JV: It's generally cleaner and simpler.

@Charles LeMaire that was very well articulated! 

I can offer x amount for your house".Articulate it better, but those are the main points.

I probably should have articulated profit as gross profit given the number of variables like you mentioned that can each be controlled by varying degrees.I agree the rate should probably be dropped a bit for the reasons you mentioned and you make valid points about turning away potential lenders.

I will follow up and see what their response is, escalate if needed and clearly articulate the numbers for them to see my liability and cash position. $500 is not a lot on 3 rentals but that's because I did the BRRRR, with the intention of recuperating all of my cash or close to it rather than plunking down 20% per house.