Thats pretty much exactly what im asking however I don't see why there would be any issue splitting the down payment and mortgage of a 4-unit multi family with someone else especially when you can both realize the full sec 121 benefit, the mortgage and property tax deductions, ect. 

This all comes down to how you're structured, how the flip cost were accounted for, if there is a partner (you mentioned "we").If it is an S Corporation and you "distribute" or "sell" the property to yourself, if there is any loss on value, which probably there isn't, know it most likely won't be deductible if it's a related party transaction.  

With retirement, you will have more problems getting a mortgage.You do pay a lot of money in interest over the course of your loan, but that should be tax deductible (it is in Canada for rentals). 

I will not be using an LLC and so will pay landlord insurance and be able to make deductions directly from my personal income.

We will be showing material participation so that we can deduct from our W2 employment.

This cost was already deducted, leaving available funds at the aforementioned 160k after the build.

In the past I just give them a 10% deduction in rent for one year until things can improve. 

Everything else can be deducted from the cash at closing.  

I deduct 30% and arrive at 315K.

It would also give you more control and flexibility in how you manage your properties while ensuring you can take full advantage of tax deductions available to businesses.