I don't think I was clear - this scenario would be mutually beneficial if the partner didn't have much capital to work with.

I would use the cash flow for future capital or for paying down the principal. 

There's lot out there this time of year... and not everyone has the capital you do...

Is the $3600 I just spent to fix a broken sewer pipe a repair to expense all this year or a capital outlay to be depreciated? 

If I sell the house now the capital gain would be around $700-800k.

So have an operating budget, and a marketing budget and capital to get you going. 

Since you seem to have traveled this road before, (I shall let you know what happens with on 1st property with GF); do you know any sources of GAP funding so I can scale up my operations in NJI can get Hard money elsewhere, Have some capital, credit and good FICOAny information would be helpful. 

@Mauricio Perez  The house sale will not cause any capital gains taxes due unless she made over $250k profit. 

(that phrase may already be trademarked but I have no financial interest in capitalizing on it... it's just sound advice!)

But as far as future capital gains, the appraisal value would be my basis?