As the investor gains experience, they are not only able to more successfully foresee the “bumps” along the way, able to handle recessions, temporary negative cash flow, unforeseen capital expenditures without panicking, but will also recognize the opportunities necessary to turn a loss into a break even.

It's very easy to make one tiny, minor assumption to fill in an unknown that completely changes the context and consequently the answer - I've caught myself doing this a few times.As far as the legal responsibility for the debt goes with Subject To, my guess would be that the contract basically provides a pathway for the seller to pursue the buyer for recourse related to losses they suffer from the default of the original loan, like a form of indemnification, but does not absolve the seller of responsibility for the debt.

The money partner leaves $10,000 in the account for any incidentals and we split the profits or the losses 50/50 until we sell in within the next 3 years.

On the positive, your losses are light. 

First of all, there’s a difference between “loss of profit” and “loss of principal/original amount invested.”

If he overestimated the value of property and can't recover his loss then it's none of your concern.

DR Horton in our market built 2000 sq ft homes in rural areas and smaller homes at 1500 and the only ones they made money on were 1500. they sold the ones above 2000 sq ft at losses or break even close to $150 per square foot. 

I believe in this so strongly that I have even once confronted a large advertising client about this issue when I discovered they had language to this effect in their terms of use in the past, and asked them to change their policy, at risk of material revenue loss to our company.

I was so sorry to hear about your loss. 

I would consider adding loss of rents coverage.