However, you may lose favorable financing terms, established cash flow, and incur transaction costs.

Your title implied that you might not do that step.To your question, I think the first factor I had always taken into consideration is: do you live in the house?  

Our current focus is working on 1-4 unit fix and flips, but eventually work towards being able to refinance properties and keep and cash flow them.My question is  tailored on the the way I should structure our relationship for the legal and tax base purposes.Should I secure the deals under my business and pay my partner out of my business operating account?

I have one property for sale right now just because i want to diversify into another opportunity outside of Real Estate and home price is up considerably from where I purchased it about 5 years ago. 

At the risk of bursting bubbles, most primary residences don't cash flow well as rental properties.

There are much better cities for cash flow out there.

Turning this 5/3 into a 9/3 that should cash flow about $2400/mo fully occupied.

It looks like they launched a pilot program in 2019 but costing homeowners up to $1M to do the conversion.https://citylimits.org/2023/03/13/in-new-yorks-fight-to-legalize-basement-apartments-what-about-cellars/I don't want to end up selling the place because it is good cash flow and would be even better once I renovate all the apartments.Thank you.

@Jared HottleThanks Jared, I appreciate the list of considerations.

Or cash flow?