Purchasing equity in a home my business partner owns and lives in.

[Evan McGee]

My good friend and business partner is looking to buy a new home, but he doesn't have sufficient funds for a downpayment on a new primary residence.  I want to give him the cash for a downpayment in return for ownership in his current home (the one he is moving out of). Then we would co-own this house as a rental property and he can move into a new home.  Any advice on this process would be helpful. I have never purchased a rental property this way, but I assume many people have done it before. My questions are:

Would I need to be added to the deed of the house or should we just write a contract? Do we need a lawyer for this?

How should we determine the proportion of equity between us?

If the ownership is 75% / 25% can we both take advantage of depreciation? 

Any advice would be greatly appreciated! Thank you.