How exactly do you define passive income?

And they bring a lot of business experience that I would value, as there is an active component to the property that will need to be managed.   

If the fees are defined as "additional rent" in the lease, the LL can deliver a 3 day notice to pay or vacate, but if they are not defined as "additional rent", deliver a 7 day notice to cure by paying the fees. 

When we look for properties we set a pretty defined criteria so that it enables us to only spend time on the properties that fit for us. 10-90 units, C+ or better areas in Jacksonville and Orlando, has a value-add component.I would suggest trying to work backwards, especially since this is somewhere you want to live.

I'd define that first.

The lease, however, defines this "fee" as three months rent. 

The Howey Test defines an investment contract (a type of security) as a transaction where a person invests money in a common enterprise and is led to expect profits solely from the efforts of others.  

I feel like I must be missing some key components in my analysis of the property. 

It defines wholesaling2.

That’s a challenging situation since you haven't defined the final product yet.