I look forward to contributing to this amazing community that has sucked me in over the last year.

Or better yet, since you don't know what the market will look like in a few years, you have a few options: (1) you could form an LLC where you are both members and you get an interest based on the value of your contribution, i.e. finding the property, managing it, etc. with a buyout right after the 5 yrs; (2) You can just own the property in your own (or your own LLC's) name and use the investor strictly as a lender, pay them interest or P&I monthly and balloon upon sale, just like a conventional lender, or (3) if the investor wants ownership, you can either take a salary as manager and just have an option to purchase in 5 years, or a right of first option/refusal if they want to sell before then.

Specs: $40K takeover (including seller fee and delinquent balance)Loan Balance after 40k contribution is $187K.So is the sales price $187K, $227k or $227 (minus the seller fee)Thank you in advance and your advice is greatly appreciated! 

Partner A purchased 1 property (A is the only person on title and mortgage) Partner B purchased 1 property (B is only person on title and mortgage) Partner C purchased 1 property (C is the only person on title and mortgage)We have agreed to split income and expenses equally (with an equal amount of capital contributed).

I would simply line out an equity split that matches your % cash contribution.

I'm thinking some rituals and illicit drugs may have contributed to this 'one of a kind' home. 

Since I am no military contribution, I assume I won't qualify for USAA.

I don't have an answer for you, since I haven't bid on HUD homes and haven't paid much attention to what's going on with them, but I do want to follow the discussion case anyone else has something to contribute!

I know I can contribution $18k as the employee and 25% of income as the employer.  

I would continue putting money into your 401k, especially if your job will contribute as well.