I have run the numbers on the calculators and the numbers all work out.

@Casey Weiter don't try to time the market, it will not work. Out

Just by looking at your expenses it should be apparent that this one won’t work out as a solid investment for you .

Also if you come across any potential deals in your area or anywhere on the central coast let me know and we can work out a deal that benefits us all.

Am I even allowed to do this since he told me straight up he plans to live and work out of the area?

While certainly not the primary or only consideration, a good name is important.Pick a name that is: short, easy to pronounce (you're going to be spelling it out for the gas company, the electric company, and tenants)available in the state where you will register the companynot already identified with a national well known company, where the domain name is available for a reasonable price (you don't want users to have to type a long convoluted name for the url address) It's REALLY not to early to have a lawyer working on the OPERATING AGREEMENT which will define the legal agreement between members and the buyout provisions in the event things don't work out.

Are they trending in that direction more intensely or less intensely than previous years (or market cycles)?

If it's a mortgage workout review ( short sale, etc ), all borrowers must cooperate too even if they are not on title.

Do I do a smaller deal that’s less capitol intensive?  

So if the numbers work out maybe that 4 unit can be expanded. ie: convert existing structure to 2 units and add 2 units. might make sense number wise, you are already doing a big job.Question is price and upper limit in your area.