In a partnership, you are pretty much permitted to divide up gains and losses in any way that you want.  

. § A company offering more than $500,000 but not more than $1 million of securities relying on these rules for the first time would be permitted to provide reviewed rather than audited financial statements, unless financial statements of the company are available that have been audited by an independent auditor;o A description of the business and the use of proceeds from the offering;o Information about officers and directors as well as owners of 20 percent or more of the company; ando Certain related-party transactions.

The key here is, what does the Oakland rent control / just cause ordinance permit you to do?

I have a friend who built one for $20K, around 600 sf, no permit.

does anybody knows about the title search, open permits, liens on the property?

Building an apartment in it could be a possibility but I don't think I could pull that off with permits.

It will require building permits and in order to get them, Architects, engineers, and Inspectors. 

Most of these are requirements for new permits and codes but can be a go to source of exposure in the event that something tragic happens.  

First, you might need to get a permit to to a sewer line install, most municipalities make you do that.

If you need help with permits, construction services, trade permits, third party inspections or architectural drawings, I'm your girl.