A local business lawyer told me that owner-occupied STR is the way to go, and I also met another vacation rental owner that told me you can get around the regulations if you legally document the short term rentals as 'time-shares' as well.

Have an attorney draw the document and the operating agreement.  

Most of the water utility districts are pretty old school and you may literally need to drive there and bring your closing documents. 

Create separate folders for receipts, invoices, bank and cc statements, PM statments, W-9's, leases, and closing documents. 

Document everything in writing to prepare for your court date.5.

The complex was originally a heavy value add project and it seems like they've done a lot of work on it (and it's evident), but it strikes me as strange that they wouldn't be documenting the work for an eventual sale.

Ideally we would get an attorney to draft up the specifics of our arrangement but things that we are unclear about include things like, who should take out the mortgage (both names v.s. the one who can get the better offer), what documentation is essential i.e. equality/partnership agreement.

Not just text on a document.

When you go to get your primary they will find those homes are connected to you and asked for their documents.

Word documents work but when are you doing an long application, they are always space constrained and can’t have conditional entries.