We would like to each get back our initial investment and split the profit.

Bought one some a few years ago and sold it later for profit without doing a thing. 

If we split costs 50/50 for everything, how do we factor that in to our taxes since each individual will have a loan in their name but the costs and profits are split?

Buy in either: - Established, affluent areas: Pacific Heights, Presidio, Cow Hollow, Sea Cliff OR- Tier 2 areas that might become more affluent: Mission Bay, Potrero, Dogpatch, MAYBE "Outer Sunset" (although yes - it's probably in a lower tier than the others) 2) Are we likely to make money if we invest in a cosmetic renovation of an older place or is the cost of labor and materials in SF likely to diminish our potential profits to a negligible amount. 

In any case, it may be profitable to raise the rents, but it's NEVER easy.

Thank you for your updates, it gives me hope that you turned a potential nightmare situation into a profitable investment!

Lets go with the 900 for the sake of this example, if I simply use your numbers even factoring in vacany of say 5% the profit shoots from 20 profit to at least a couple hundred.

I'm looking for the perfect situation to just dump a chunk of capital into a business and let my money go to work for me and in return collect a percentage of the profit on said business. 

Minimal profit.

@Jon Dorsey - You will definitely still be profitable at $2M albeit less than you may want.Are the utilities public or private?