Of course, such "savings" typically come with increased spending over time versus making the expenditure up front.

You make up the cost of rehabs by buying lower, you don't usually get to ask much higher (especially on capital expenditures like a roof)

Do you both co-sign on the loan and simply have a contract that outlines how the cash-flows, capital expenditures, capital gains, etc. will be divided?

In regards to your current deal, I would be hesitant because even though you will be able to afford the mortgage payment and it looks like you have a renter already in place, there is still a lot more that would need to be figured in.1) Taxes ( Not sure in your area, but you could find out very easily or this may already be included in your payment)2) Cap Expenditure (Figure at least $100/mo)3) Repairs (Figure at least $100/mo)4) Property management (8-10% of current rental rate roughly $150) - I know you may manage it yourself but if you ever decide not to, you want to take that into consideration so you can plan for that.5) Vacancy Rate (5-10% of current rental rate $75-$150) - even though you have a renter you have to plan for the worst case scenario if something happened to him and you were unable to find someone to rent to.So if you add the above that is an additional $425-$500 not including your monthly taxes.  

Did you account for vacancy and maintenance and capital expenditures?

Bad tenants (selected by your PM), poor initial rehab (done by your TK provider), capital expenditures, maintenance costs will kill your cash flow#3  Saving grace is appreciation.  

Also, are you reserving for monthly/regular expenses and capital expenditures like roof, parking lot, etc?

Long term, you have to think about portfolio management given depreciation recapture, capital expenditure needs, tenant headaches and such...

You need a new property manager.The "50% rule" is a rule of thumb that say of the gross scheduled rents, expenses, vacancy and capital expenditures will eat up about 50%. 

I would have all your major capital expenditures evaluated to find out how much life expectancy is left on those items.