I’m just trying to go into that with some research before hand. 

I know of 5 investors locally from the local RE meetups that have fallen into recent bad deals and eaten 100K+, because they didn't follow the 70% rule on pricing the purchases and trying to flip in volume for small profits vs a handful at reliable profits. 

Option 2: I have been finding more deals on the more expensive houses in the 250K+ range, i have crunched numbers on a handful of houses in this range come across a good number that have showed positive passive profits in the $200+/month range, but im concerned on these taking up to much of my active income.

Until an 'investor' reaches critical mass (escape velocity) in number of units turning enough profit that even the occasional catastrophe won't  change their life style, it's got to be keep your head in the game and all hands on deck.It's all fun until it's not.  

Failure to comply can result in a $12,000 fine (and they do enforce the rules, which are easy to enforce seeing as short term rentals are almost always advertised on a handful of websites that anyone can see including code enforcement agents).

These are all questions whose answers will help you chart the way forward ... there is no one size fits all answer.From an operational perspective it is always pleasant to know that your building envelope is relatively efficient (insulated and air sealed); that building systems (electrical, plumbing, HVAC and communications are up-to-date and dependable) and that you have the ability to put accountability for resource consumption in the hands of the tenants.  

Obviously we don’t think the % should be split based on simply financial investment, because of our hands in involvement, but how do we adjust our % to make it a Win win, based on me negotiating everything and my partner locally here helping with everything in between?

The sellers said they had the title in hand but weren’t able to find it.

He has 10-30 deals in philly every month and he can send them to your inbox.The best real estate Pod cast hands is Bigger Pockets.   

Easier to wrap their minds around 10 years vs 30 yearsThe P&I makes it worth my time (and servicing fee)And lastly, passive investors will gladly take this deal off my hands for $40k any day of the weekYour situation in AZ is drastically different from my market, so the underwriting will go to suit.Seller financing in general is on the increase nationwide because of regulations.