Suggest you invest inspection with a foundation contractor give you practical aspects of foundation. 

If he funds the purchase and repairs, I will do all the work (meaning some demo, finding/scheduling/managing contractors & projects, etc) we will spit the proceeds.

The best way to do this is for you to get it under contract (or an option as @Wayne Brooks said. 

Steve James - James Contractor Services. 

I also have a contractors license and a Construction company.

In that unfortunately (but potential) situation, you end up having to bring in another contractor (who will get paid), and then still have an equity obligation to your friend.In my experience, partnering with a contractor who brings nothing to the table other than their contracting skills is a situation where the investor has a whole lot to lose and not a lot to gain.

If the contractor is unfamiliar or uncomfortable providing you with a fixed price quote ... should this be a big red flag about the contractor?

Managing and maintaining contractors within budget, scope, and schedule is something you have to learn by doing.

I have been sent a certified letter of such. 

I would send a 7 or 10 day notice via runner and certified mail stating that they must stop due to being in contradiction of their lease.