I am puzzled as to what my options are or on how my exchange would work?

I don't want to do a 1031 exchange, I don't want to a seller finance...what other creative financing options are there that will allow me to save on taxes.    

3 in exchange for no more split payments.

If you want a partner, I think the partner would need to get the financing in exchange for you doing all the legwork with the flip.

I would be very much willing to learn, maybe exchange of knowledge?

The investor gets 100% of cash flow from the rented side and pays 50% of expenses.Essentially this is double leverage and in-house management for the investor in exchange for credit approval and equity share for my friends.Does this seem unreasonable?

I think a point that drives home your post is the fact that you don't have to pay taxes on that appreciation either if it's your primary - not the case in rental properties (even though you can do 1031 exchanges). 

What does a 1031 exchange do to the delay of the tax benefits and the depreciation?

I was thinking a $40k buy-in, in exchange for equal (1/3) partnership.

You will however also consume much more time, take much more risk in exchange for that higher rate of return.