The payment will be higher and you still get a 25% haircut on the rents. 

I agree with @Bennet Sebastian that if you sell with three years left, you'll take a big haircut. 

What your friend needs to get back out of it is irrelevant to the sales price, so he might just have to take a haircut.

So when an investor wants out early likely there will take a haircut which will dilute their anticipated returns down to non-optimal level.10 years to ask an investor to hold money is a decade.

Someone is going to have to take a 'haircut'.  

On the other hand, if the buyer has to inherit sub par tenants and a bunch of deferred maintenance, then you may take a hair cut on your proceeds.  

 $140 gym shoes, $200 meals out, offroad tires and wheels for trucks, $100 haircuts for the wife, $150/hour dog trainers etc.  

It's my understanding that if I do have a business then all the little things become write-offs even so much as getting a haircut to "look presentable for your business" becomes a write-off.

They have been firm on "not taking a hair cut" but you made me think of this from another angle:  It has cash-flowed for them for 10 years and I believe they put in 25% originally, so you're right, they could still break-even despite a lower sale price.  

Or I will give them 4k for it as is.. ( this one was in fine shape) we settle at 6k they took 44k hair cut. )