I am going to have my lawyer look over the contract that my friend and I will sign.

In addition, it would seem that you would lose the stepped up basis at death if you are on the title.I suggest you consult a CA profession tax consultant and possibly a CA probate lawyer.  

This is a lawyer questions because you can't generally pay a fee. 

The lawyering I did drawing up my own legal documents did not turn out well, I can tell you that!

@Pandu Chimata, As a private lender myself, typically what happens is the title company has an in house lawyer, where you can get a mortgage and note prepared for free.

We also retained a lawyer so the property won't forclose.

HOWEVER, consult with your lawyer and/or property manager to verify the applicability of the law. 

Most people cannot do that on their own and would need to pay for a title search and for a lawyer to review it.

Be intimately familiar with it or find someone that is. 6.Buy umbrella insurance to CYA. 7.If you do not hire a Realtor and are not familiar with contracts, hire a lawyer to look over.8.Make sure your credit score is good and you have liquid assets for more than you think you need. 9.Talk to an investor friendly lender to get familiar with the types of products. 

Now you are shelling out cash to lawyers.