It really all depends on the amount of risk you want to involve yourselves in. 

Explain your concerns about the property's flood zone status and see if they are willing to release your deposit or reduce the sale price to account for the potential risks and lower property values associated with it.While $5K isn't a trivial amount, sometimes avoiding a much bigger headache down the road is worth the loss.

@Ella Marie the Pro's are you can build long term wealth, the Cons are you can lose money if you cannot properly quantify risk.

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

If you have to put much more into it, then it's probably not worth the trouble.

Additionally, if he’s legally and financially tied to the property, it might limit his flexibility if he wants to make major life changes, like moving or starting his own investment ventures.Ultimately, the decision depends on how involved you want him to be in the financial side of the property and how much risk he’s willing to take. 

Leveraging your equity through a HELOC or cash-out refinance can be a smart move, but it depends on your risk tolerance and goals.

Certainly) and some of the lowest regulation risk in the country so long as you buy in the approved areas.I'm happy to share real world revenue and theming examples as well.

Anyone in business takes risks, but a lawsuit and some other things don't look great.

I have one long term partnership that we share capital but I still do all the work ( rain maker) he is a cpa so he does do the books and tax return though :)  WE built one subdivision together were he put in 500k and I made him 1.2 mil in 18 months net profit so that was not bad.