Unless each of you qualify separately have you told your potential landlord your plan if one of you decides to move out? 

@Alejandro Facio it is hard to separate the business from their owner, if the business is small.

If the tenant stays past the term of their lease they would be what’s known as a “Holdover Tenant”.You can research online about how to handle a holdover tenant.You may end up having to evict them and also file a separate suit for damages/cost of not being able to move into your new home - like staying in a hotel or having to put your belongings in storage.Another option could be “Cash for Keys” where you or the current owner agree to give $1,000 (or some other amount) for the tenant to sign a legal agreement stating they will move out by X date.

If I were to split the side-byside fourplex into separate legal descriptions - townhomes - they would sell for $1.65M or a little more, but I intend to hold and assured the seller that I wouldn't sell and pay him and he get his whole tax bill with one whack.

I have a close friend who lives in Meridian, and he had owned three rentals at one point, so we always talk about partnering, but I can afford 3 separate houses for the price he could get one.

There is the first and last month's rents for the lease, and there's a separate check for the Option Consideration which buys the Option Contract. 

The basement is currently used to service the washers and dryers for two of the units, I can expand the basement to make separate storage units and increase the rents for sure. 

What is involved as far as cost and scope of work to separate water meter/billing for a duplex?

(For example separating two homes on one larger parcel)- Setbacks for the zoning. 

Separately metered.