@Bill Brandt Johanna does a nice job of explaining the reasons you might be able to get a pro-ration in the article here. link: https://www.nerdwallet.com/community/t/capital-gains-taxes-selling-home/3371/2

Ultimately the decision is up to you, but there are some things to take into consideration to help rationalize your decision.

Some of the biggest challenges investors of all sectors face is: 1) Managing your emotions and feelings to make rational decisions. 2) Time management. 3) Taking action. 

The most important thing to learn is when to walk away...and not to fall in love with, (and rationalize) a bad deal. 

What you're doing here is trying to rationalize your expensive hobby by asking us to approve it. 

If your partners are not reasonable enough to sit down and rationally discuss the split and other business decisions, you are going to have trouble.Just FYI, the end result of "me and a group of friends" want to go into business together is very, very rarely a good result. 

Putting more money down to get higher CF is an illusion.Example:  $100k Property; Loan terms 4.75% for 30 years; CF wo/loan = $750/monthA - 20% down - $20k DP; $80k loan; DS = $417/Mo; CF = $333/mo($4k/yr); payback DP = 5 yrsB - 25% down - $25k DP; $75k loan; DS = $390/Mo; CF = $360/mo($4,320k/yr); payback DP = 5.78 yrsC - 30% down - $30k DP; $70k loan; DS = $365/Mo; CF = $358/mo($4,296k/yr); payback DP = 7 yrsEvery year you hold a property means a greater chance of a CAPEX, vacancy, repair, etc...which comes out of pocket, and must be added to the $$$ cash needed to recover before you start making a profit.The biggest illusion, and the worst rationalization you can do, is to think that by increasing your DP you can turn a negative CF property into a positive one. 

If you plug a hypothetical $1 million property into the BP buy and hold calculator and use average rations (3% for everything) you see that you can generate another million in 7-8 years.

If so, how is that rationalized as a multi family unit? 

I also rationalize using the funds because I was fortunate (and wise, but mostly fortunate!)