While only a tiny percentage are interesting, you can analyse much more deals much faster and they are ready to go.

Or, to provide seller financing for a period so the percentage of OO units flips.Otherwise, you are buying them for cash flow and you will be able to sell them for cash flow and not much more. 

Essentially he just wants to be passive.So is the proper route to create an LLC between him and I as partners then have a lawyer draw up a contract outlining the percentage of ownership I get by doing all of the work?

So over time a standard percentage has been established.

How often (or percentage) of your leads turn out to be dead?

I understand that there are significant tax implications associated with what operating expenses you can write off (mortgage interest, taxes, insurance, maintenance/repairs, etc.) and also eventual sale proceeds (121 exclusion v. 1031 exchange), depending on the percentage/square footage you assign to your personal residence versus rental property.

For a quad, should these percentages be higher since there is more moving parts or should it even out since there is only one roof, one yard, etc?

It's not that FHA loans require a certain down payment percentage (beyond the 3.5%), but, rather, they have max limits for each county ... depending on the price of the property, you could hit the loan limit and still have more than 3.5% to cover before you reach the purchase price. 

Repairs are not expected, they could raise their monthly percentage to account for an average or add this 10% whenever needed. 

My business partner and I are trying to decide how to split up the partnership in terms of percentage.