Buying a property with a partner, what do you think? advise?

[Jirair Kolangian]

Hello bigger pockets, 

Im currently in escrow for a new (to me) property with 2 houses (5 bed 2 bath each) on the lot for 1.025m. They currently bring in a combined 6000/month (signing a new lease for a year). The zoning allows to have a total of 7 units on the lot. 

I am an architect / contractor here in l.a., however im a bit stretched thin so my friend is forking up all the cash. He has no previous experience with real estate, however is a really sharp business mind and a good guy overall. We have discussed a 50/50 split no matter the outcome. He is putting 30% down

i have a 3 step plan and would love to hear your opinions on this (my math is generally super conservative): 

A) Split the houses in half and have (2) 3 bed 1 bath and (2) 2 bed 1 bath units  ----spend about 60k on 2 new kitchens, a couple interior walls, and 2 new meters 

     - this would flow about $8000-$9000 total, and bump the value to about $1.5m

B) Pull plans for 3 additional units or for new 5 units (would have to demo the rear unit) ----spend about $20k on paperwork

      - this would bump up the value to about 1.6-1.65m 

C) Build the new units assuming all 2 bed 1 bath 800s.f. on 2 stories 400k-750k 

     - Each new unit would flow about $2200, bringing the total to about 14,500 - 16,000, bringing the value up to 2.75m @ 4.5% cap

Generally speaking, 2bed 1 bath in that area goes for about $2500+, way undershot for safety purposes 

What part of my plan would be the best part to sell at? 

Would i be about to refinance out all the money that was put in by my friend and the hard money that would be required to build, while still cash flowing? 

Anyone have experience in this type of partnership? what are some things that i should be aware of beforehand? 

Thank you for you input guys!