Nothing held back for maintenance because the houses they recommend buying are all newly rehabbed, and nothing held back for capital expenses because you should sell them in less than five years and move into multifamily investments so nothing major should break before then. 

Expensive and time consuming to maintain and almost no benefit. 

They also provide tax services which I do not use, too expensive, and help you establish lines of credit for your business.

In terms of the math, let's look at return from rental income and return for equity:For each item, calculate a year's return, and there's your approximate ROIFor the ADU conversion: ($4000/month x 12 months)/$500,000 cost = $48,000/$500,000 = 9.6%That's before expenses, which will cut that number down by several points.

Tax Returns: Request copies of the individual's previous years tax returns will confirm there yearly income and account for expenses and liabilities.4.

I have a couple years of experience in managing 40ish short term rentals remotely & on-site, so I believe I could use a management incentive to lower my buy in.Thank you!

No unexpected cap ex expenses, and as zack mentioned we've done a 1031 on a couple properties that appreciated quite well to buy other rentals. 

A property's operating expenses are those that it incurs on a monthly or annual basis and are considered regular and continuing.

Do you have a set list of expenses you work off? 

Your friend may be able to claim interest paid on the underlying loan as a business expense.