I am unaware in CA any franchise brokerages operate the way your contract says. 

(You could put this provision into the deed of trust (where I operate, it would be a deed of trust).I know that's alot of trouble, but . . . 

And it should depend in what kind of equity and experience they bring to the deal and how the operating agreements are written up as to what to pay out to them.

I am more interested to know the operational and legal ramifications of this set up though if this model is successful to improve the cash-flow and the value of the building in min 5-year time frame.  

If you find a property and the owner shows you an operating statement of $100k, it is safe to assume that the property is worth ~$1.43M (NOI/CAP = Value). 

You might want to check those numbers to make sure that's what you're looking forJust a back of the napkin calc shows that your month net operating income might be almost zero  Asking price $135000 Monthly payment  ~$1600 Monthly income  $1800 Water  $80 Repairs  $100   Total expenses  $1780 Total monthly NOI  $20   Keep in mind that $100 for repairs a month is probably a low estimate and the monthly payment of $1600 includes taxes, insurance, principal and interest.

My CPA has instructed me that the auto expenses (at least the proportion used for rental activities), overhead such as office supplies, software, tax preparation, and other items which occur to operate the rental properties (AS A WHOLE) are expensable on Schedule E relative to the activity (e.g. based on number of units per property) by "cost accounting or cost allocation".

Does anyone want to take me on a field trip here in San Diego so I can see first hand operations?

For me personally, I wouldn't purchase a turnkey property without visiting the area in person to meet the turnkey operator, compare neighborhoods, etc., especially on the first one. 

I am only 2 years into this so I have not gone full cycle but I would bet the smaller operators will return more roi than the larger ones.