My biggest concern here is the trunk duct in the attic being rotted out but will asses during inspection time.

However, my underlying concern has always been the horror stories of how these rental rockstars 'lost everything' during the recent crash. 

I would be more concerned about clean title in this scenario than seeking to utilize a self-directed IRA... and am surprised that this issue was not first addressed by other respondents... for example, a defaulted mortgage based on "assignments" created by MERS "Vice Presidents" litter land records in every courthouse in America. 

Or leave the partner there and keep finding deals for the partner to do more.  50 % of nothing is nothing.  50% off something is cash in your pocket.  

It leaves very little room for profit and no room for mistakes. 

Maybe I die before the five years is up and leave nothing in my estate. 

Not leaving room for your own families.

.$323,472 leaves your pockets to buy the Investment.

I'm concerned about possible future conflicting interests, like we want to sell and she doesn't or vice-versa. 

If you are leaving the money in the business it isn't technically yours yet which is why lenders don't want to lend.