We file a joint tax return.I put this question here to see if this is even practical or possible to pursue?

Lender REQUIRES the insurance remain in seller's name joint payee with lender.  

The smart way to do this is to have each of the three of you as separate parties doing a Joint Venture Agreement.

I still do Joint Venture with people that want to learn the craft, but I won't partner or charge a fee.

CA is a joint property state so you'd need to be careful about separating interests. 

In Joint Ventures, I always set it up 50/50 for cash flow and equity split with a 51/49 ownership split.

It's better to have your own LLC and to do a Joint Venture with them that keeps your exposure to their past and their future, at a minimum.

If you are going for textured walls it goes faster since you don't have to hide as many joints but if you want a flat painted wall, expect the sheet rock and mud and tape to take a lot longer than you may think.While you have the walls open, inspect the water and drain pipes & replace the ones that need replacing.And, if you are upgrading wiring in the bathrooms to code, it's a good time to upgrade the shower fixture which has to be done behind the wall anyway.Since it is an investment property and 3,800 sq ft, if you can find a room to put in a second kitchen so you can rent out a room/couple of rooms with their own kitchen, this would be the time to consider it.Hire a couple of highschool kids to take off the lath and plaster, save yourself a lot of money and keep them off the street. 

Thanks so much to anyone who could weigh in or give pointers to connect the dots for me.Well, you could do a joint venture agreement.

Another one does joint ventures in small/medium multifamily, another one is going solo on small multifamily.