Here are the pros as i see it: easy (no purchase necessary, you know the property), likely prop 13 property tax discount, possibly below current rate loan.  

This allowed me to get a construction loan to repair the other buildings and repay my investment into the property.

College used to be a lot more affordable, I studied in Europe (where college is free) and it blows my mind to see kids with 200k student loan debt trying to get ahead on a 50k job.The housing market has started to drift apart geographically.

@Yents Ybrimovic If the 203k loan only requires 3.5% down and you can finance all the repairs in the loan - then what exactly is your friend contributing?

If it's in your name you can look into the potential for a HELOC or potentially refinance to pull out some of the equity you've created, but you'll need to do the math to see if you're payments will increase based on the new loan terms.

I have found some information that might be helpful John.There are government backed programs like Fannie Mae Homestyle Renovation Loan and Freddie Mac Home Possible Renovation Loan, in addition to the FHA 203k loan. 

You should speak with a CPA and a tax attorney to be safe.Regarding your thoughts about 1/3 equal splits - sounds good until you check out the cost of getting a DSR rehab loan or borrowing hard money.

Investors may like the income on the spreadsheet, but the appraiser for a traditional loan won't care.

I'm using my VA loan so I don't have to put any money down & can keep money in my account to fund rehab deals. 

We currently own 13 rental properties and have paid off all loans/mortgages including our primary residence.