In a recession the STR market will be the first to get hit and your proposal doesn't have an exit strategy as the value of the property along with daily rates would decrease substantially. 

What is the most current status of another anti-citizen bill proposed by our nanny state?

This is a good model but doesn't account for a return of the $500k your parents will contribute..For example if the property generates $10k per month with $6k in PITI & operating expenses the proposed return for your parents would be: $2k and $1k for each of the minority partners.

One more thing, at my work, when we do cost plus we have to come up with an estimate and get approval to exceed the estimate which is something I would suggest adding to your proposals.

Usually a 1 to 1 or 1.25 is standard..or the $1k needs to be sufficient to cover the PITI of the proposed loan.

However, older instances are to be considered more holistically, suggesting a more lenient approach to past financial or rental difficulties as time passes.Exemptions and Protections:Certain properties, particularly older houses that cannot easily be brought into compliance with current codes, are exempt from some source-of-income rules, acknowledging practical limitations in applying these rules universally.Landlord Liability:The ordinance provides protections for landlords in terms of reliance on third-party information to reject a tenant, mitigating potential legal risks associated with tenant selection processes.Fair Housing and Legal Compliance:All considerations of prospective tenants' applications must align with fair housing laws and other state and federal legislation, reinforcing the ordinance's compliance with broader legal standards for housing discrimination.

My first word of advice, if that is what you are proposing, is to make sure you are ready for all that means.  

What you are proposing is a theory, it doesn't make sense in real life.

When you don't report, they assume you bought it for $0.You probably received a letter CP2000 which is basically a proposed tax.

Georgia: Pros: Reasonably quick eviction processes, landlord-friendly legislation, and growing cities like Atlanta offering good investment opportunities.