Hence the lot on which the house resided was taxed at a 45% discount based on actual value, while the tennis lot was taxed at about 4 times what it should have been by value. 

Consider forming an LLC for liability protection or an S-Corp for tax efficiency if flipping frequently.This post does not create a CPA-Client relationship.

It would be his primary residence so most likely a duplex or triplex house hack. 

I've also heard of requirements to own for at least one year before you can use the home as a STR.Hawaii is a leftist state that doesn't protect private property rights.

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

OJs main asset shield was his primary residence in Florida, which has unlimited homestead protection.

You certainly want to vet your property manager to ensure they are focused on balancing asset protection with tenant satisfaction.

Quote from @Cody Caswell: Quote from @Jay Hurst: Quote from @Cody Caswell: Is it true you can use taxes, depreciation, insurance, and mortgage interest for qualifying income when applying for an FHA loan on a primary residence? 

Typical cost for the setup would be in the $15,000 range which would include production of the Private Placement Memorandum, Subscription Agreement, and Operating Agreement, Investor Qualification Forms, as well as filing Form D with the SEC, and state “Blue Sky” filings in those states where your investors reside. 

For the $525K property, with the low mortgage rate(you will probably never get a such low rate), it might make sense to hold onto it for now, especially if you can still sell it as a primary residence within the next three years and avoid capital gains taxes.