Maybe because of price, maybe something very subtle.

Repayment of the invested capital is part of the waterfall, but it can occur at different points in time depending on how the waterfall is written.So bearing that in mind your #1 & 2 are conceptually correct at a high level although there can be subtle differences that can have a material impact on the actual numbers.As to a lookback, if the waterfall is calculated properly the lookback is a continuous calculation so it wouldn't be possible to over-distribute to the GP.  

I try a more subtle approach starting from what I write in my mailers to what I say in a call.

Rich Dad Poor Dad, Millionaire Real Estate Investor, Multi- Family Millions (Dave Lindahl), ABC’s of Real Estate Investing, The Book on Rental Property Investing, Hold, The Advanced Guide to Real Estate Investing, The Due Diligence Handbook for Commercial Real Estate, Millionaire Real Estate Agent, The Book on Managing Rental Properties (Brandon Turner), The Emyth RevistitedCrushing It in Apartments and Commercial Real Estate, Emerging Real Estate Markets ,The ABC’s of Property Management, Wheelbarrow Profits, The One Thing, Outliers, Start with Why, David and Goliath, Chasing Excellence, Extreme Ownership, The Compound Effect, The Entrepreneur Roller Coaster, Be Obsessed or Be Average, The 10x Rule, The Obstacle is the Way, Ego is the Enemy, Am I Being Too Subtle, 48 Laws of Power, Atlas Shrugged, Man’s Search For Meaning, Sapiens, Tools of Titans, Four Hour Work Week.

Subtle difference between acting like a non trusting supervisor and a curious noob. 

Make offers where you KNOW it's a deal IF they accept.This may seem like a subtle difference, but it's important. 

As @John Woodrich mentioned I keep a digital & editable copy of each unit's lease so its not difficult and it allows me to make subtle changes to policy.  

Lots to know for sure so make sure you are working with a lender that knows all of these "subtle" rules to FHA loans. 

It is NOT part of any down payment, and should not be applied to any down payment.Lease Purchase:  Same as Lease Option with one very important difference.a-  Lease Agreement is same as aboveb-  Purchase Agreement is the subtle difference. 

As Sam Zell mentions in his book “Am I Being Too Subtle” not to avoid risk, but manage risk, and know the downside.