He couldn't sell the property because no bank would give a loan on it with that in the contract.2.

Once we fix our side up and move in the property should be worth $200k-$250k (it was very undervalued at time of purchase).Why not take a larger loan initial on the purchase of the first duplex and lower your down payment, use the cash you have for the second purchase.  

I have 20k saved and plan to use an FHA 203K loan and house hack to net zero/cash flow minimally on my first investment.

Current ideas are to view it as a partnership, or an interest-bearing loan from me to him.

It depends on the loan type and lender.

It is for sale by owner, but my realtor told me that the owner has an existing wrap loan on it.

After living in the primary property in Orlando I figured we could move back to New England and rent that property out which seems like a win-win as far as getting a conventional loan rather an investment loan.

The only thing is you would have to do a hard money loan, or find a private money lender that will finance you. 

I have 20k saved and plan to use an FHA 203K loan and house hack to net zero/cash flow minimally on my first investment.

Look into private finance, partnerships, FHA loans, and conventional loans.