They got a good deal; I wish them well. 

Will this impact our ability to get competitive financing (we are both well qualified as individuals and even more so together)?

Thanks Tyler  They have 18 reviews on google - so I would check that out as well. 

I think you may want to start of the arrangement in a more simple fashion.Ask for a loan in which he will get a stated return 6% to 12%.If you are both successful happy with this arrangement, upgrade to a partnership.I think a partnership off the bat makes things complicated.You will also likely make more money in a loan agreement if the project does well.

Just make sure your LTR tenants keep their units nice, so your STR units' market well.  

Well, well well...isn't that interesting...

They claim it will boost property value.It might, but I feel like that is should I should have known about prior to purchase and I'm also unsure how the city can do this with out permission or paying for it.

If not you will have to cover the cost for both (unless you have a well). 

You have to be an expert at dialogues and the risks of subto are not widely known or are said to never happen (loans being recalled), but that's not what I would bet on.

On top of that these markets have done very well in terms of appreciating in the last 5 year (See Memphis 50% increase, See Detroit 100% increase).