It's almost impossible to find a condo where after the mortgage and fees you can positively cash flow.

I would recommend talking to someone to figure out if you qualify for the deduction, and to perform some tax planning to best position yourself to take advantage of the deduction.

Also, your sibling still effectively gets a discount since 50% of it goes to paying him/herself.In regards to what should be in the operating agreement, the attorney who drafts it for you would be in the best position to answer that. 

I’m not positive that’s the best choice though.

I'd be a little more worried about the 2.7x rent.  3-3.5x rent is the safer bet.  4 dependents on one salary is also a big red flag. 

Now we are in a position where we can dump the cash we pulled out into another deal along with the money available in our HELOC.

You can use the standard rental income form or I believe IRS prefers it to be taken as self-employment income (schedule e / schedule c) which if is a loss, can be deducted off your regular income, however if positive may incur paying more.

Most of it comes from natural sprawl due to its position between the hot markets of Wynwood, the Design District, and Coral Gables.

For the Smith’s to put $4,734 in their pocket from wages, tips and salary, they would have to earn $7,283 in a 35% tax bracket.

Now I am required to write and sign a formal position statement to be submitted to the MA Commission Against Discrimintation.