We have to unless we want some regulator breathing down our necks auditing years of REO sales.Its almost comical with some of the posts I read out there.

Many are well represented by sellers & turnkey operators here on BiggerPockets. 

To be honest, as a PM (take it for what it is worth to you), I don't see the PM fees as a major contributor in the 12%+ in additional operating costs, but I am not privy to your Owner statements.

These management companies have no shame and expensing cost to you, even though you operate on a smaller scale than the larger companies. ]

The challenges are unique but I think there is a lot of potential to pair local operators with investors located around the country. 

If you're operating out of a partnership, you're going to be subject to self-employment taxes regardless of whether you take hourly income or a percentage of the profits. 

They consider a company who buys the same as a company that originates and not only do you need the license but you are next exempt from the 3 year MLO operations manager.

The Private investor is also the realtor and will not have anything operational to do with the project but will be listing the project for sale at 6% once it is ready.    

To clarify a little though, I'm wondering what expenses (perceived and/or real) the appraiser will use on the liability side of things to arrive at net operating income. 

I really like that idea, especially with Comic Con coming up!