This can be a big deal for the builder and eliminate the possibility of modular/prebuilt structures.

As we do it, it does not eliminate the split, but does protect the investor.

In other words, this cash flow property was no longer cash flowing positive...but had a lot of new equity.So, the REI sells the property with NO vacancies, to eliminate the negative cash flow...and recover the cash put in (rehab cost) AND the additional profit (new equity). 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it.

(a) If any memberunexpectedly receives any adjustments, allocations, or distributionsdescribed in Treasury Regulations § 1.704‑1(b)(2)(ii)(d)(4),(5), or (6), which create or increase a Deficit Capital Account ofthe Member, then items of the Limited Liability Company income andgain (consisting of a pro rata portion of each item of LimitedLiability Company income, including gross income, and gain for suchyear and, if necessary, for subsequent years) shall be speciallycredited to the capital account of the Member in an amount and mannersufficient to eliminate, to the extent required by the TreasuryRegulations, the Deficit Capital Account so created as quickly aspossible.

I actually analyze just about every property that Rentometer pulls up and I eliminate outliers. 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it.

A proven lease that has been used and tested by a property manager or landlord you trust and then reading Landlording on Autopilot by Mike Butler will eliminate 90% of your problem tenants/issues. 

I don't think the police are going to put an end to this, so I want to eliminate the possibility all together.

Eliminate it so it won't happen again.