It is rare people offer you a split of total profit unless you put your own money on the table. 

Depending on his involvement other than providing the cash you need and it will probably effect his profit split to do the deal. 

It’s been my most profitable property.

Although that's like robbing Peter to pay Paul.It really comes down to what hurts worse - paying interest on debt or taxes on profit.

I am currently in contract to sell for 115k and looking at a profit of about 25k.

Section 8 can be very profitable and advantageous for landlords .

You cannot receive the funds as a reimbursement or they will be taxable to you.Regarding offset losses, the IRS really doesn't care too much how much profit or loss you have on a property. 

That imagined $40k profit will be eaten up in a New York minute.Good luck.

Can someone help me with understanding how to calculate what makes a good profit margin (I.e 1 percent to 5 or more) when looking at the property price to rental income.

@Alina Trigub I need 20 units rented for it to turn a small profit.