We have been keeping it parked on the sideline however beacause were getting married in August and want to ideally walk away from the wedding without any debt and perhaps profit a few K.

I owned a two family which I rehabbed and which I sold in 2003 and made 200K profit on.

After Repair Value /Comps - Provide comparable sales data that confirms your After Repair ValueRepairs - Provide a detailed estimate/scope of work of the repairs that you are planning for the project.Loan Terms - Provide the financing terms (interest rate, points, holding period) you have budgeted to pay the lenderHolding Period - # of months it will take to rehab & resell the propertyOther Costs - Provide a breakdown of other costs (buying, holding, selling & financing costs) Profit Margin - Highlight the total profit & profit % you have built in the deal.  

If you can, deciding to make this post on BP was very profitable for you.

(probably 9-12% depending on leverage if property is in California.)An equity partner can work well too, but you will be giving up a lot of money in the long run if the deal has margins this good. 

Whatever the arrangement you come up with NEVER relinquish control of the deal.If you absolutely have to keep them in the deal for the long game them why not give them each 5% ownership in the LLC who will buy and when you cash out structure in such a way that you get 100% of your $$ back first before any profit is distributed.

Do I owe capital gains on any profit from the settlement, as I occupied the house for more than 2 of the last 5 years?

It is taxed at your marginal rate up to a max rate of 25%.

@Brandon KompYou may be exposed to depreciation recapture and capital gains tax upon the sale of an investment property.Capital gains tax rates are 0%, 15% or 20% depending on your overall tax bracket.You may also be hit with an additional 3.8% net investment income tax depending on your bracket.Depreciation recapture is taxed at a maximum tax rate of 25%.If your marginal tax rate is 37% - the depreciation recapture will be taxed at 25%if your marginal tax rate is 12% - the depreciation recapture will be taxed at 12%

In exchange he's going to take 50% rental profits and 50% of what we get during the refinance.