Additionally, I proposed introducing new retail products, and the owner has offered me a 40% share in return for my expertise in retail.

In a recession the STR market will be the first to get hit and your proposal doesn't have an exit strategy as the value of the property along with daily rates would decrease substantially. 

One more thing, at my work, when we do cost plus we have to come up with an estimate and get approval to exceed the estimate which is something I would suggest adding to your proposals.

This is a good model but doesn't account for a return of the $500k your parents will contribute..For example if the property generates $10k per month with $6k in PITI & operating expenses the proposed return for your parents would be: $2k and $1k for each of the minority partners.

Usually a 1 to 1 or 1.25 is standard..or the $1k needs to be sufficient to cover the PITI of the proposed loan.

My first word of advice, if that is what you are proposing, is to make sure you are ready for all that means.  

What you are proposing is a theory, it doesn't make sense in real life.

When you don't report, they assume you bought it for $0.You probably received a letter CP2000 which is basically a proposed tax.

What is the most current status of another anti-citizen bill proposed by our nanny state?

They were initially resistant to it when first proposed in april but as revenues are coming in every quarter, lots of pockets in the economy are suffering and this is one for sure.