If your clients/or yourself put the time into learning and figuring out a niche in the RE world that excites you, start looking for deals that make sense and always run the numbers.

You might suggest that once they get their money back, you split the first $100k (or whatever number makes sense in your deal) 25/75 where you get 25%, then anything over $100k, you split 50/50.  

Also, consider creating a JV agreement for the specific opportunity you and your new found partner decide to pursue!

Whatever makes more sense. 

It makes so much more sense for me in my situation to sacrifice that cash flow so that I can focus elsewhere.

I sometimes think about investing there given my affinity with the location...but realistically it just makes more sense to put my money in rentals in Indianapolis where I invest currently and the returns are still solid.

There's no wrong way, as long as it makes sense for YOU.

It likely will only make sense to keep if yoy decide to make it your primary residence (keeping the prop13 savings).  

Although whichever option you go with make sure you're also thinking about the long-term property value and what makes the most sense vs trying different angles now that negatively impact future resale/property values down the line. 

I’ve seen that in my W-2 job, so it makes sense that the same value is applicable in real estate.