They are living in a market they are priced out of and look to Midwestern cities for lower entry prices.They do not have the time, ability &/or desire to be an active operator in the business of rental real estate.

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?

No K1s are involved unless you operated it inside an S-corp. 

Under market rent is normally charged by hobby landlord investors or lazy investors that do not wish to be engaged in operating a business.

I bet if you still tried and no matter how old you are or how settled you are, there’s always enough time and I believe you would and still could be amazing at something you should work hard to get.

You bet it does.

Thinking this may be my best bet to starting out as I have money but no income to be able to get a loan.

Then a guy like me isn't your best bet.

I would bet 4plex 203k (refi later to get out of lifetime MI) would be better if you plan to stay in one location for at least a few years. technically, I think you have to live in it 12 months, look into current regs, you might be able to rinse and repeat annually.

Your best bet is to attend local meet ups.