For that deal we started an LLC and filed as an S-Corp. 50/50 split for cost and return of profit.

A friend of mine owns a lot and wants me to build a spec home on it to sell and we split the profit 50/50.

I have done one wholesale deal and I'm ready to pursue this full-time. 

Monthly Income: 1100Expenses:•-Repairs/ Maintenance – 50•-Real Estate Taxes – 112.50 (1.2%)•-Insurance – 30•-Vacancy Costs – 83•-Capital Expenditures – 100•-Total Monthly Expenses: 375.83 Downpayment: 18000Loan Amount: 72000 (with 20,000 rehab money)•-30 Years @ 5% interest Closing Costs: 4000Total Initial Investment: 22000Monthly Mortgage: 386.51Cap Rate: 9.54%Monthly Cash Flow: 329.32ROI: 17.96%After evaluating this, if this property was in a better neighborhood with less crime, would I be naive to pursue this property?

Now I don't think all cash out refinances should lead to profit, but I think most of them should.

Our strategy is a 3-5 year flip that when you add up the cash flow, the tax savings from depreciation, the mortgage debt pay down, and the fact that we bought it under market value and that we are selling it on a lease option so we don't need to pay realtor fees and have minimal closing costs, our average total profit over a 3-5 year period is round 60k per property that my partner and I split.  

There's a lot of red flags on this and I would personally move on.If you still want to pursue it after looking at their background and credit report, might I suggest  a higher security deposit or pet fee up front.Still, there's always better tenants out there for you.

Cash buying - which is one of the least profitable ways to invest.

To get started I recommend reading @Gino Barbaro book (wheelbarrow-profits).

The only reason I asked is that bringing in partners to the table will dilute the profit margin.