It's up to the parties to discuss and determine what that "pad" looks like.

That's a licensed person who represents neither party, but serves to bring them together.We often have one commission for a buyer's agent and a lower commission for a facilitator.  

This stands in direct opposition to a capital intensive industry such as manufacturing where employee and owner skill may be less important than the company's fixed asset profile.While S179 is a valid strategy in the attempt to drive a taxpayer's taxable income below the 'threshold amount' so the SSTB receives the un-phased out Sec 199A deduction, a SSTB may not have the investments in fixed assets necessary to drive them below the threshold during the year unless they're already very close to the threshold.Some other ideas for taxpayers owning a SSTB to lower their taxable income:Roll taxable bonds into tax-exempt bonds.Life insurance & annuities.Real estate (it's BP after all).Oil and gas investments.Charitable gifts (including CRTs).Gifts to taxpayers with lower taxable income (powerful option is to gift a percentage of the business to a trust).If a SSTB is well above the threshold, a compelling case could be made that the business should be a C Corp in the current tax environment. 

At $480 we'd be -$100/month but stand to make ~$50k if we can bring rents up to market value

They will also charge you to have an inspection by a 3rd party to make sure the work is done.

Both parties must agree to cancel the contract, and at this time, the sellers are unwilling to do so. 

Develop an operating agreement that spells out the purpose of the LLC who has what role, who makes decisions, how are differences between the two of you resolved and an exit plan.Have an attorney draft up the document so each party is protected.  

The only regulation that still stands in BP that you mentioned is that BP can ban short term rentals.

As others have said, whatever you two can work out that feels fair for both parties should work.

After several break-ins on prior rehabs, I decided to install security at all projects for two reasons, keep my contractors honest and notify me when unauthorized parties attempt access.