Daisy chaining and joint venturing with a lot of people complicated everything and made communication a giant game of telephone.

I'm thinking about a couple options - 1) Lending her the money for the DP on a multi-family unit and then starting a business where have a joint partnership that owns the house.

Assuming you and your friend want to invest together you should establish an LLC with a joint bank account.

I've read in some places that a married couple filing jointly pays a 0% capital gains tax if they earn under $77k or so per year, which we should be able to reflect on our Schedule C with appropriate write offs.

Where can I find a joint venture (JV) agreement?

You'll need an attorney to build a good operating agreement and LLC for the joint venture, likely two LLCs, one to hold title, the other to manage the property.When you're ready to refinance, you're basically doing a BRRRR, you'll be in a better position on experience with a lender, but the one who signs on the loan will need a net worth equal to the loan size and 10% of that shown as liquid.

Presumably they are tenants "jointly and severally" which means that each of them (including her) are still on the hook for the whole thing.I don't think the weed has anything to do with the above by the way.

Move back into the 2 family and rent out one unit, filing jointly after 3 years get 50% of the 500k exemption since I would be occupying one half of the building.  

And then there are hybrids like Joint Operating and Management Agreements.

Second, there are many active investors who will be happy to share information and you will want to spend as much time networking as possible.The topic is "Measuring Your Value -  Structuring Partnerships, LLCs and Joint Ventures"  More details will be available at www.knoxreia.com Happy Investing,