BP is a great spot to explore partnerships like this.

I have a friend who is a contractor and we have been discussing a partnership on flipping. 

If you have any investment property how is the investment property titled (in your name only, in a 1065 partnership LLC etc etc)....last question - what is the size of the SBA loan you are attempting to get and what type of business/property are you trying to buy?

Apparently everyone else here made the same mistake in reading your post to mean you were talking about how to arrange a partnership. 

Is it an individual, or is it a partnership, or an LLC or a Corp?

Investors in real estate syndications typically receive either limited partnership interests, or membership units in an LLC, both of which are securities, not real property.

Always Did our own work" and had Rental units, until the Crash.......Question is, we had some people which stepped up to join with us if interested to form a LLC Partnership, We decided to do it, they buy the Property, and are Silent Partners hands off everything, we Handle everything day to day, do the work and Split the profits, 50/50 which we agreed, we just finished our 2nd house and sold it, closed , and ready to move forward to the next, however, in the middle of the 2nd house, they brought us a paper, kind of an operating statement of responsibilities, the 1st house we split about 40,000 and we were told on this second one, that they have to collect interest on them loaning the LLC. money to purchase the property, we thought that this was just a formality,and they would then have to put money back in, "on paper" which would be for the purpose of the  IRS, but we were told, that's the way the Book keeper said it had to be structured, so the project took longer than expected, to finish and sell...........but they have been instructed to treat these houses as inventory, new for us, as we never had partners before, short story long,We only ended up clearing a 13,500 profit, but turns out the interest was really going to go to them, along with a 50/50 split, so almost 10,000 dollars in interest, plus we split the remaining 3500, so we didn't do that well. obviously, is it ever customary for private money investor, to get a chunk of interest and 50% of the profits, I was not aware of it actually going to them, as real interest, since they receive 50% of profits as well, I feel like we must be the biggest fools, and duped, has anyone ever tried to pull this off?

How would someone suggest to structure a partnership contract for 50/50 equity on small MFR when one party is providing the down payment and closing costs, and the other party simply being the owner occupant of the property?

@Richard YoungYou can not do a 1031 on the sale of an investment property for a partnership interest.

@Chris SeveneyRegarding the accounting/taxation of the fund - you want to make sure the accounting firm has the knowledge and capacity to take on the work.Does the accounting firm know answers the to the following questions.Do they specialize in partnership taxation -Do they know how a partnership return is impacted if there are foreign investors, tax exempt investors, individuals as investors, entities, etc.Do they know how to deal with the taxation of the operations - If this is a real estate fund - do they know the in and outs of 1031 exchanges, how different items are depreciated, 1250 property, 1245 property, bonus depreciation, section 179 expense, etcDoes the fund operate in multiple states - are they familiar with the various state tax laws.Will the fund allow composite return to be filed in behalf of its investors - does the firm know which states offer composite returns and in behalf of which entity types they can be offered for.etc etc etc