Defining where and how much you can invest would help you start the process.

My policy says it is defined as "the purchase price, less land value, plus the amount of money you have invested to improve the property.  

You need to define your goals and what you want and in what time frame and THEN you can determine how much you need to save to start down that path.Re paying off your personal residence early.

Do we refinance into a above defined 30yr mortgage since only in then the mortgage+HOA payment will be covered with a rent of approx $2300 (assuming rents remain stable).

I see that as being really broad.

You just have to make sure that your roles are clearly defined, your personalities mesh well, and your goals are very aligned.You can't go wrong with either method if you do them carefully. 

Define what shares you all have, what your roles will be and how you'll handle your processes. 

In line with the above, what would you define as CapEx that would warrant being taken off the offer price? 

And you'll hear plenty more from others commenting the same.I study passive investors and one of the biggest hurdles is defining criteria and networking with sponsors.

@Philip Wilson since you have defined your goals, you can now take flipping pretty much completely off the table.