Is there an issue cause it was originally gifted to me, and wasn't purchased by me for investment purposes?

The numbers can be too easily manipulated and there are far too many companies that will sell an investor a property by presenting a contract within minutes of first contact, and all based on simple math that they provide meant to speak to the lowest and easiest to understand (but also manipulate) number.Now, none of that is to say that plugging in fake projections to boost IRR doesn't happen or is not wrong. 

You might see if they will give you a deed in lieu which would be the easiest path towards getting made whole. 

Keep in good cahoots with that neighbor get him a small gift from time to time and build a friendly understanding so this doesn’t become a problem 

It's easiest when you have multiple beds of the same size (for example: K, K, Q, Q).

I feel like just keeping focused on the goal, which for us was acquire 5 properties our first year, is the single easiest and most difficult thing to do especially when stuff is hitting the fan.  

@Tara Kinney I'm my opinion, working with private lenders is by far the easiest and most profitable.

I would gift him the down payment so he could get the loan.

Getting paid to do something you enjoy is a gift.

It's not clean...you run into gift tax issues...property management issues (Sch C) for the child...profit motive/no profit motive for the parent (which drives depreciation) depending on intent, facts, and circumstances.It would help if we knew all of the facts.