You never mention how much cash you have to invest.  

As I mentioned before  - just selling - is a great tax deal for me. 

@Brian Garrett ah I thought you mentioned FoA by name above.

They mentioned to us about roof damage and reminded us about the shingles that flew off during Hurricane Irma.

As @Marc Winter has already pointed out, it is unwise to sink a bunch of money into rehabbing a property you don't own, not to mention the various other problems Marc mentioned such as insurance and permits.A better way to do this is to take title subject to any existing financing and give the seller a note for the balance due in 1 year or upon resale of the property, no interest, no payments.

The other tenant should go as well for the reasons mentioned above.

Assuming he accepted your offer of $21k I would keep it as a rental.If the ARV is $34k as you mentioned you could refinance at 75% LTV.This would give you all of your money back and it will be cash flowing.That leaves you with zero money in the deal and an infinite ROI.You then have that $21k free again to buy another property.

Personally I would not do a deal for $100 a month on a $120k property - but this is situation dependent as I mentioned above. 

I only mention hitting me in PM's or FB so it doesn't spam the post honestly. 

If you're taking care of the aforementioned items and anything else that comes up, and all he has to do is put some money down, a 50/50 split is a great deal for him.