Like, "hey honey, I was just thinking about money, and what I/you earn in salary versus the rent from (pick some house/unit/bldg) and its interesting because when I add up our...".  

Hey everybody Im looking for new or vets in real estate investing maybe you need that 101 who can coach you through your first deal maybe you need funds for a project or maybe you want to expand your education and rea...

The less I "own" possibly the better especially when someone is looking to sue and make money, however the more I "control" the more I earn and can leverage for bigger and better deals.

If you have any credit card debt, use the HELOC to consolidate your credit card debt (don't acquire any more debt), which will increase your credit score and reduce the interest rate on your new home. 

Turns out, he is looking to earn a better return on his cash as a silent partner and we agreed to start looking at opportunities together.

@Daniel Gonzalez's approach also isn't crazy.You can mix them:If you find a deal on redfin/mls/whatever, you're using that agent for doing normal agent things and they earned their check.If you find it on your own, or if another agent brings you that deal and sells it to you, that means they closed the sale and earned that check.Your primary go-to person needs to be exactly one agent at a time to be fair.

This is a strategy I've had a lot of success with in Pittsburgh, and I like more than the single family idea because you reduce risk by having cash flow coming in from other units while you're living there.

If the deal is too thin to support a hard money loan and/or there is not enough borrower skin in the game to recoup your capital if things go awry, then you can lose money just like any other investment where capital is put at risk to earn a return. 

Any recommendations for someone familiar with REI and state tax / city earnings tax issues?

I totally agree with creating value and earning your investors trust by putting together a kick *** deal.