The expected returns (16-20%) are great, and the managers interests are closely aligned with me the investor.  

But neither of those are priced according to the rents... they are what they are.I seem to remember Ben having a spreadsheet which built in the cost of CapEX and was solely based on the components that made up the residence (maybe when you were talking about $30,000 pigs).

I would say align your approach with your passions and skill set.

What if the baseboards I'm putting in on corners align crooked?

Every seminar that we are organizing that has an EB-5 component to it always sees a significant higher number of attendees. 

Also, I would want them to have some skin in the game, so instead of just paying them a flat fee (say 7 - 10% of gross rent), I would prefer to pay a smaller flat fee, but give them a bonus if the property each year generates a profit above a certain threshold (say give them 30% of profits above a 5% cap rate).As someone who doesn't know as much (yet), I feel like this kind of partnering makes sense to align my property managers incentives with my own.

Entities have two major purposes: Liability Protection and Tax Alignment.

Indeed, you can further break that goal down into one more discrete component. 

So while you are owner occupying it, most HELOC lenders will not offer you a loan because it still has an investment component.

 :)10 years should be plenty of time to build up your passive income through RE, just make sure you pick a strategy that will align with you goal.