LLC interest if thats what your doing can have uneven distributions.. thats why we use themso you can own 81% of the LLC and spread the ownership to the others as you see fit.in your operating agreement you spell out how proceeds profits and loss are to be allocated. 

He had recently purchased the company and it appeared that this was his first time running operations (should have asked more questions here).

Purchased from the developer with plans to capitalize on significant operational efficiencies due to owning the property next door.

Another idea is to execute an addendum to the LLC operating agreement to lower Marilyn's membership percentage in the LLC and increase my and my spouse's percentage so our funds can stay in the LLC.

Since you asked, NOI = Net Operating Income: the income remaining after all expenses are paid (excluding CapEx and debt service).

My monthly/Yearly Analysis are Gross rent of $5K/60K, Operating expense(details below)$4.7K/55.9K, net cashflow is $0.338K/4K of 7% operating marginNOI( excl P&I payment ) is 35K/yr with a Cap Rate of 5.83%.

A higher cap rate means more cash flow (specifically net operating income) for a given price.

Having a great property manager and or owner operator that provide good value to residents is the best way to have a successful rental business. 

I could help walk people through evaluating multi-family investments and/or operating a multi-family investment as an owner/manager.  

Some of the cost that you might be able to write off would be your operational cost for your partnership (LLC) that is not related to renovating the houses.