We want to make sure it's fair because we don't want to hurt a friendship over it, so we really want to have this buttoned up before making a purchase.  

Even that would feel way too low if the friend is called upon to make good on the loan.Let’s review what actually happens from the guarantors experience   if the loan goes into default and see if you think your friendship can survive it1.

If it is in a negative equity situation, the purchase becomes more challenging as you would need to work out a short sale with the bank.Probably a bigger concern is maintaining your friendship.  

You know, understanding conveyancing local customs and forms (for example a friendship with an escrow agent) is important.

Is it because I am working with a very close friend (and, therefore, preserving the friendship is the main goal, especially if he trusts me enough to invest with me), or is for another reason?

This lawyer billed for everything, like I said before my cpa doesn’t but I’m guessing that’s due to our friendship.

I would call it friendship.

I would honor your original agreement you have and if you want to maintain a friendship or personal relationship that’s fine but do not mix business and pleasure.

He then decided he money was worth more then the friendship and used the money as a down payment for his own house. 

I do not know near as much as most people about real estate investing which is why I love getting yalls opinions on this site for guidance and education and I appreciate the help and the friendship!