I'd like to pop the top and expand the footprint of the studio and possibly add a 2nd bathroom in order to convert it into a 2bed/2bath with long term goal of selling it as a townhouse (all 3 units are already individually deeded, individually metered with gas and electric, have their own furnaces and water heaters, etc.).

If that is the case, then you might consider including a small acquisition fee for all the up front effort of sourcing and securing the deal.With limited info (and even with all the info) I can only tell you that it ultimately depends on what your goals are, what you think is fair and on what your partners are aiming to achieve out of this deal as well.Again, talk to your real estate attorney and your real estate CPA and have them advise you on the best structure to move forward.Probably not the straight up answer you were looking for but I hope it helps.Good luck!

In order for my strategy to work though, I need to be able to secure the correct first deal: Value add 5-Unit under $500kThe goal would be to force appreciation, elevate cap rate, and flip the building to another investor.

So as I make extra payments on the principal I pay off  the mortgage faster and increase the amount of cash that I could get if I needed it quickly. 

What if I did the minimum, and charge under market rent but fill vacancy faster? 

My eventual goal is to do a 1031 exchange on these rental properties and pick up some apartments. 

The goal is to become financially free and have multiple long term properties paid off!

I was able to achieve stability, automate my payments and savings, and open myself up to new life and financial goals. 

If he wishes he can take his previous landlord to court to collect.Primary goal is to receive payment, keeping or losing this tenant is irrelevant.

So i have some management insight.My goal is multifamily, either FHA or creatively financed.