As far as I know, your assumptions about the tax implications are correct for non residents, it was one of the main factors that stopped the idea of investing in Spain for me.

Was I correct in my statement?"...

I'm going off the understanding that you still need to spend 500+ hours in the business to achieve material participation (please correct me if I'm wrong). 

I’m looking to ensure I structure things correctly and attract the right partners.

If I understand correctly your siblings goals are to sell their rental properties, use the funds to purchase a primary residence they'll eventually move into, and limit their tax liability correct?

Examples could include:Partnering with other investors to share risk.Using seller financing or lease options.Leveraging creative rehab techniques to save on costs.Negotiating with contractors in a unique way to reduce expenses.I’d love to hear any stories, tips, or approaches that helped you pull off a deal others might have instantly passed on.

But I assure you it's correct. 

Do not rely on your subcontractors to know/perform the code correctly for your area.

I ended up having to pay for their tax preparer’s time to meet with me and make corrections.

Is this interpretation correct?