Everyone is correct in advising you to treat your friend in a formal fashion - no loose ends.

They're old fashioned...simple but they work.

You still need to keep track of income/expenses on a per property basis even if you have 10 properties in one partnership.In the similar fashion you track the initial seed capital contribution you should be tracking subsequent contributions needed to fund the construction etc.

I believe in old fashioned saving your money, and living simple to put your self in a position to invest your hard earned money.

I'm a newbie trying to get a grasp of the note business and would love any insight on how to sort through a tape in an efficient fashion.

Should I stick with this route by saving up another $80k-$100k to make a big purchase, try and risk selling for equity when I can; abandoning great cashflow in hopes of bigger/better, or maybe look at vacuuming up some smaller properties in the short term to put my savings to work in a more incremental fashion and sell them after some appreciation to get into another larger multifamily? 

If we ever have a "drought" (not much of a drought, in Indiana), people just hook up their hose and old-fashioned sprinkler, or even just use the hose with a nozzle.This is standard midwest behavior.

It could be argued that a lack of the old fashioned grab root and growl method is missing.You can do so much more than you think you can when you put your mind to it and try.Skills can be learned and talents can be magnified by just doing!

Nice to know we still have some good old fashioned hospitality out there.

Real estate is not cheap, or easy, but if a plan is formed, and carried out in an intelligent fashion, you will be able to mitigate risk and build a nice monthly cash flow.Good Luck, and if there is anything I can do for you, don't hesitate to reach out :)