My father has long paid off his home, and is planning on selling it to me within a year, as well as cutting me a small break with the final asking price. 

My father and his brother currently own a shopping plaza with 6 units.

Just spoke with my father and yes he has experience with that...he has made recommendations for clients before. 

My future father in law is most interested in ensuring his daughter's interests were I to do this as a business full time, and leave my day job, asking for 30% of the appreciation of the value of the business or 5% of the appreciation of the value of the business if I continue to be an investor in the business as a "secondary" job.

That would be correct if OP's father has made or intends to make an S election for the LLC.Since OP did not specify tax status of the SMLLC, we're left to assume no alternate election was made, and the LLC carries the default tax status: 'Disregarded Entity'.A DRE should not be issuing W-2s or 1099s to its owner as it's effectively dissolved for federal income tax purposes and there's no distinction between the owner and the LLC.

That being said, he can essentially pull from equity and just pay the taxes himself when he is ready.yes he's very lazy,  the house is paid off in full which was pasted down to him from his father. real estate not for everybody when April come it will make the 5th year.

Hi @Tamara Glass -- My Father In Law (Commercial Developer), Wife (Partner/Gladiator), and I have are serious about OZ and the opportunity.

  - Your post states “you and your father are purchasing a home together and that you will then buy it from your father”  but you can’t buy a property that you already own.  

I would like to lay out how it currently stands and see what more experienced investors would do in my situation.My father owns 12 rental properties, they are all in a family trust. 3 are managed by a property manager, the rest I manage for a small salary.

I sell 1 of my properties on the market to a stranger then I 1031 exchange purchase my father's primary which he is moving out of and then I will convert that to a rental property.