In your case where it appears the structure to apply the toe kick is missing, adding 1x4 or 2x4 to the cabinet structure would be advisable.

This class includes any property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units.

Congrats on getting this deal Harsh.First things first, you should be talking to your attorney and your CPA for legal and tax advise on how to best structure your deal according to what you agree with your partners.That being said, the structure of a deal can take many different shapes and forms and it will vary according to the type of involvement the partners will have in the deal.Are you in charge of putting together the deal, securing debt, managing the operations?

Earlier this week I came across someone speaking about the method of Wholesaling as their primary way of doing their REI.

@Daniel DietzPerhaps you can have Frank put the 300k down and take out a 300k loan to purchase the property and then shortly thereafter cashout refinance it  at 75%ltv (450k).This would allow you to return 150k to Frank.By structuring the transaction this way, Frank will have access to the cash he wants while enabling him to defer taxes on the whole 300k.I believe this would be a permitted transaction but I'm not an expert on 1031 so you should definitely double check with @Dave Foster.

My plan is to buy single family homes and utilize the BRRRR method and to get into notes. 

As for rentals, there are a lot of different methods for determining whether or not a property would make a good rental and how much you should offer on it.

Any other insight on how to structure a owner carry deal that is advantageous to the buyer?

Have you given any thought to business structure?

Other than the main structure of the building most other things inside could go either way.