Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

My only reply here is to say to simply focus on the business objectives.

You often get what you pay for. 

If this is simply you not wanting to accept partial payments and the rent is current, stop accepting it - and send a Lease Violation/Notice of Quit for Non-Payment of Rent - and force the full rent to be paid per the lease or start eviction.  

You want to know whether the mentor will cater to your specific needs or simply follow a standard program.6.

I was willing to pay more than my competition.

Business owners won't want to get tied up in litigation and if there is a good chance they will lose, it is easier to simply follow the contract.How would that work with a lower-end tenant? 

Quote from @Leeling Chew: It doesn't matter who pays the bills.

Less licensees paying into the pot means everyone's costs go up.

You're not in the position to be a cash buyer...as a former wealth manager, it's simply not a good play for you for many of the reasons stated above and more.