Do you have the standard "joint and several liability" clause in the lease?  

My dilemma is that I save slowly and don't have enough of a down-payment to buy a multi-family property (where I really want to invest).I settled on the idea of buying an inexpensive first property while learning the ropes until a friend offered to fund some joint-venture investment properties.

I would also make it a point to explain to them that each of them is "jointly and severably" liable for the rent (at least that's the language I have in my standard lease).  

You might want to either look at hard money loans and/or Joint Venture funding with equity partners.

@Kathleen Wilcox be really cautious about offering a 5 year lease with option, Due on Sale Clause IssuesHere are the exemptionsd) Exemption of specified transfers or dispositions With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;(2) the creation of a purchase money security interest for household appliances;(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;(4) the granting of a leasehold interest of three years or less not containing an option to purchase;(5) a transfer to a relative resulting from the death of a borrower;(6) a transfer where the spouse or children of the borrower become an owner of the property;(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or(9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.

But, you may want to develop some friendships with others who have maybe worked hard or made some sacrifices in order to be financially healthy and who share some interest with you.  

If one investor funds the whole thing as EQUITY (more likely given the circumstances) it is a security and specific procedures must be followed UNLESS the investor is a working partner and has some managerial control, in which case it's a partnership or joint venture.You asked about structure...this is really between you and the source of money.

when looking for the best area to start buying homes for fix and flip is it best to look for areas that have a healthy market or ones that do not?

When these newbie investors I've helped...get deals they don't know what to do with (or they don't have buyers for or capital to acquire these deals with), who will they call for help or do Joint ventures with?

Since you're speaking of non-monetary default, this may not apply to some joint venture where other performance may be required, but even in those cases, any partner/lender can not simply begin foreclosure without making a demand to cure the issue.