Better pay the PM fee, then you get a professional you don't have a friendship at risk, and they get the midnight calls, AND you can write it off as an expense. 

Only invest with friends if you are willing to risk the friendship.

I would love to connect and make lasting friendships within this group.

I want to make sure and he wants to make sure our agreement is 100% legit and friendship proof.

Any advice or friendships are welcome.

If anything goes whack and you lose your job or tenants destroy the property or there is an EMP which destroys the earth and your property (joke), your friendship will be destroyed if you do not have the $$$ in 5 years to pay him back and you do not have the loan documented.   

-friendship. as stated above, no one gives (directly) money to people they don't like.

I want a win-win here and would rather maintain our friendship, than cash-flow an extra $200 a month.  

If you go down that road you are going to put your friendship in jeopardy, so you are better off just starting with strangers. 

All of your money from waiting tables, construction, and cashflow can go in the bank to save up as a downpayment toward the next property.Bringing on  your other friend would complicate things and add significant risk to your friendship.