The special allocations must have "substantial economic effect" (essentially meaning that cash flow to that partner could be impacted somewhere down the line by the allocation) When you start getting into partnership tax law and special allocations it is probably a good time to loop in an attorney and/or tax pro.

Before I build of course, I want to make sure it's worth it - I want to make sure the cash flow and equity will be worth the investment. 

But if we have to invest around 500k SF in Milwaukee, the dilemma is that that's the starting condo 2/1 price too in bay area ; also in Hawaii I could have cash-flowing 2/1 STR.In summary the dilemma right now is:1. if we continue invest in highest CF in OOS, the replacement cost is 3 times the FMV.

How does the property cash-flow? 

Ultimately, setting up and maintaining an LLC comes with annual administrative costs so another thing to consider is if your cash flow is ready to support these additional costs. 

The equity portion will end up being the positive with the buy and hold method, so I’m looking for a way to be creative to get to a better income flow/better return.

So always make this one of your most significant considerations when evaluating real estate deals.

I definitely will take all your tips into consideration!

.- $36k long term rent not taking into consideration vacancies- We will be doing cleaning/turning over units by ourselves.

I would go with the cash flow property