You're issue is more of an Agreement in some form or fashion as to how any business or partnership will be run (are they passive?) 

You should definitely put together a partnership agreement spelling out responsibilities and limitations.  

If I can make the numbers work, how do we structure the partnership for a scenario like this? 

This basically brings the borrower back to 0 financed properties for conventional lending purposes as of current guidelines (May 2017).The most effective way (90-95% probability) to make sure an underwriter doesn't count them in your financed property count is to have your LLC that holds your properties file a 1065 partnership return since these properties do not flow down to your personal tax return (form 1040), and therefore only issues a K1 form down to your personal return.

Hello. I am finding so much conflicting information online regarding which entity to use for wholesaling real estate. I was going to get an llc, but my cap suggested a GP with my wife. He claims there will be less tax...

A presumption of a conflict of interest exists if, without prior notice:- Any director, officer, or relative of a director or officer enters into a contract for goods or services with the association; or- Any director, officer, or relative holds an interest in a corporation, LLC, LLP, partnership or other business entity that conducts business with the association or proposes to enter into a contract with the association.The disclosure requirements now mandate that the entire proposal contract for goods or services must be listed on the agenda of an upcoming meeting, with a copy of all related documents delivered to the unit owners.

If there's no coverage for this type of damage under your policy, it certainly won't trigger any loss of use or loss of rents coverage either. 

@Jason Hirko @Charlie Fitzgerald  So for those who do a partnership or JV, and one partner is just the equity guy providing the down payment funds, and maybe the other guy brings non-monetary resources (he can do the rehab, or he can manage the finances, etc) and other value to the table... in this case, the guy that just brings "other added value" doesn't have any skin in the game either, if the deal goes south, right? 

A silent partner AKA passive investor/limited partner makes your partnership a security (a syndication) and you need to now use a syndication SEC attorney and the fees will be high.

You switched financing, which triggered a new inspection that resulted in necessary repairs.