The losses would have spiraled out of control for me had I not been able to sell my second house immediately.I don't look back on my experience with any regrets since I know the risks we take playing this game. 

An audit could be triggered by a number of factors that don't line up when run through the IRS's system, and create an exception.

That would not be from the appraiser but rather a score the appraisal was given by an automated system. 

The systems you have in place to handle leads, follow-up and your sales processes are also huge factors.Another factor is what is your monthly marketing budget?

What's the exit strategy if any, for the investor, given that, with 50%, he has no control and the market there is illiquid, especially when the HELOCs out of North American properties are much more expensive.Properties in Costa Rica are already expensive and I've tried many times to make a potential investment there work and it's never worked with the figures.

What you seem to be missing is your main need is an accounting system.  

I make sure that they help in creating new systems and processes, always asking for their advice.  

Also control the thermostats so the tenants don't jack up the heat in the winter giving you a massive bill.

Based on what you wrote, it sounds like your project partner lost control and got pushed over by the contractors.

Systems don't work if there are any exceptions.