Depends on the amount of reserves and overall financial picture but high interest savings account is the simplest/safest bet for many.

The simplest kind of real estate investment partnership is an even split where each party invests equal money and effort into the investment and gets the same rewards.

What is your guys best input on how to structure this deal and what are the best simplest contracts out there. 

Since they are still living there, they will be able to access more capital by using a HELOC, which is available from a number of places, but the simplest place to start would be by contacting their current lender and seeing what terms are available for a line of credit.The perks of a refinance would be that they could move off of a FHA loan and onto a conventional loan and drop their MIP payments monthly or annually. 

Simplest would be looking for a multifamily with one vacant unit.  

The simplest way is to simply buy the place solo and have them sign a solid lease agreement.

That's the easiest and simplest solution. 

The simplest solution (which according to Occam is usually the best) would be to move on to a glorious next home purchase and let the existing roll.

I like simple and option 1 would be the simplest and cost effective.

The simplest way to achieve what you want is to purchase the property subject-to the existing mortgage.That said, there's a decent amount of training and paperwork you'll want in place before tackling such a transaction.