Here is what I would do. Have your step son purchase the home with your money that you loan him. You can have him sign an unsecured promissary note for the amount of the purchase, rehab materials and carrying costs (lot rent, utilitis etc). Just guess a good amount.
Then when he sells the home he will collect the down payment and create a note. Then purchase the note from him for a little over what the basis in the home is. He will then pay back your unsecured promissary note with the proceeds of the sale. You have a discounted note and he has a very low taxable event (almost nothing if he sold it to you for maybe just $100.00 over the basis). You could then split the note payment anyway you want.
If you have read DOW I believe Lonnie goes over a couple of different ways of doing this. One pro for this is that your son alway has a higher authority figure when dealing with a seller or a buyer. He can always say that he would love to do what the seller or buyer wants but that the investor (you) will not allow it how about …(fill in the blank). Other benefits are a lower taxable event since he does not receive much profit and you get to strech the taxes over the time period you are collecting on the note.
You can do your first 7 deals this way then you can flip it around and do 7 with him being the investor and you purchasing the homes. This way you can do 14 deals with no worry about the dealer license.
Good luck with your investing and I hope this helps
Ruben D. Flores