Tell Section 8 your plans and tell them your belief that it is under market rent by $800 a month, that is the best way to get the info you need to make a smart decision.

Want to split the debt equally but not sure how to do that.

Example being, owning three houses that equal $1,000,000 in value, or owning one $1,000,000 multifamily.

Basement bedrooms/bath/living doesn't equal above ground bed/bath/living...and in most areas, doesn't come close.Also, being on the border of what could be a better market than the one this property is in, doesn't change the fact that this property isn't in that other market.

Both loan options equal out to about the same per month on the mortgage.Anything I'm missing here that we should keep in mind when making a decision?

Banks generally only start requiring estoppels on 5 units and up, but in my opinion they're equally if not more important on the small 2-4 unit MF transactions as it's often difficult to get hard numbers from sellers on those in general.

If you wish to sign the loan, the only requirement is that you have a net worth equal to the loan amount and liquidity equal to nine to 12 months of loan payments.

I think this is primarily because sellers largely still hold the belief that a cash offer is fundamentally higher, better, and more golden than a financed offer. 

@Mark Rogers an equally joint venture split is usually how we start. 

You both seem to be bringing a vital part to the table... but as the originator of the deal I don't think I would drop below 50/50 on equity if your financial contributions are equal.