Best way to end a partnership

[Vinvi Gucci]

All, 

Looking for advice, suggestions to resolve a partnership. Here are the facts. Please bear with the longish post.

A friend bought a property for 140K to rehab and long term rent in Sept. 23 using a HML. The loan was for 177K incl. 82K for rehab. She did not start the rehab due to insufficient funds and focus on other properties. My LLC (hubby and me) stepped in when she invited for partnership and paid for the rehab completely. (yes, we should have done more diligence on her being a partner and not as a friend) We agreed that our share in the partnership will be based on the cash each contributed. She would bear the payments of the original loan of 177K and we would bear the payments for the rehab which was at 142K. As rehab progressed and the HML paid out the 82K progress payments, she took that money and paid out her outstanding dues on other projects. Towards the end of the year, we added our LLC to the deed. We now wish to refinance and are open to my friend's request of giving her the option of exiting the property or staying in based on numbers. During refinance, in the option of exiting, she would have to bring to the table around 36K (176K less 140K purchase price). We are considering paying her a bit of premium. In the option of staying in the partnership, she would have to bring in 82k. We have not been able to rent due to permitting issues. I have been running around to fix that and it will take another 6-7 months before the issue is sorted out and we rent it out. Her credit is high 600s vs ours at high 700s and will be the basis for refi if she stays on.

Are we thinking this correct and fair in terms of both options? She does not have funds and wants to look at the numbers before she makes her decision. Are we approaching the calculations correctly? I do not want the property to foreclose nor drag my credit down because of this deal. Selling is an option but want to use it as last resort since there is long term value in this property. Appreciate any help to navigate out of this mess. Thank you