This is how I operate in my business.

Hello - this may be a newbie question but from reading the various articles on BP and Investopedia, my understanding is that Net Operating Income (NOI) is defined as operating expenses required to run and maintain the property but excludes Loan Payments, Capital Expenditures, Depreciation, and Amortization.The IRS has recently raised the Tangible Property Expensing threshold to $2,500 (from $500 previously) per item so if you took advantage of this change, wouldn't it decrease your NOI since you can expense smaller capital items as repairs & maintenance instead of capitalizing and then depreciating them over time?  

Environmental Protection Agency estimates that toilets consume 27 percent of indoor water usage.Property managers and landlords sink 25 to 35 percent of their operating costs into utilities, while water costs, in particular, are up an estimated 200 percent in the past 15 years.Meanwhile, small, barely noticeable leaks may add $900 to yearly water statements, with larger leaks totaling, in some cases, $4,000.

A 2000 ft^2 house which operates at <$500/year in energy costs should be what we are building before we get to 2030.If there was the political will to make a real improvement our building codes, the energy discussion would become moot.

But I don't think you should be writing your own operating agreement for a 50/50 partnership.

Set to be completed in the Summer of 2017.The Following Info is according to the information from the Developer:Purchase InfoInitial Market Price: $700,000Purchase Price: $649,900Initial Cash Invested: $187,475Income AnalysisNet Operating Income Annually: $52,484Cash Flow Annually: 22,847Financial MetricsCap Rate (Purchase Price): 8.1%Cash on Cash Return (year 1): 12.2%Internal Rate of Return (year 10): 19.6%Sale Price (Year 10): $896,059Rental Income is forecast to be $1,400 per unitUnits are 3bed, 2 bath and a garageUnits are 1,600 SqftI feel that the seller is optimistic on some of the numbers so in my calculations I have increased expenses (CapEx budget, management Fee at 8%, Insurance, Utilities) and I have also increased the vacancy rate from 3 to 5.2%. 

As technology improves I think you'll see the better operators bypass the platforms entirely and gain access to distribution using the aggregator sites.  

I can see this described as RTO to the seller as a reference initially because it's easy for them to understand, but not an actual operator.  

@Jeffery Waicak it looks like many missed that you mentioned it is your friend with the good credit, not a random agency pairing people.If you were to do something like this, I would recommend an LLC with a well thought out Operating Agreement.

Of course, you just made it clear that its not as clean an operation as I explained, but did I have the basic idea down?