Many sellers will say something like "well, we show $200,000 on the books, but there's another $200,000 under the table".Any sales that don't get recorded simply don't exist for your purposes. 

Unless you have an appetite for risk and want a second job, or bring real estate expertise to the table along with a work ethic and don’t mind running a real estate investing business that will enable you to beat the stock market, in which case you should buy into a bunch of syndications and rentals.

I'm on the fence here regarding some options that I have so I'd like to lay my position on the table and get some feedback from the general community in the hopes that it can help guide my decision moving forward. 

The seller left money on the table?

I would  bring to the table: the deal, the market/real estate knowledge, the real estate attorney, the mortgage broker/bank.

We've found most owners undervalue their properties leaving a lot of money on the table. 

As I keep saying, even today I live in a commercial with my wife, two children and we have zero furniture with the exception of office desks, mattress sets and a few tables.

My goal was to buy properties all cash and take the risk of being over-leverage off the table.

Typically land value is around 20% of the value of property once finished, maybe you could bring the land to the table for a share of the proceeds.

Another thing you could consider, is maybe your buddy brings 75% of the down payment/rehab costs to the table and you cover the remaining 25%.