There are many avenues to take with taxes, but I am by far not qualified for that kind of advice so talk to an accountant and/or lawyer to figure out what may work for your situation.

I highly recommend reading "Lawyers Are Liars" by Mark Kohler.That being said, a simple LLC and an umbrella policy is what I see most people using.

We've gone out and hired lawyers state by state at great expense, to make sure that the forms meet state-specific concerns and address concerns that we've seen come up across thousands of interactions with landlords over the years. 

I have heard and read a number of times around here that I can find funding to come to the table with the rest of the funds to close the deal.I'm fine paying closing costs and lawyer fees and I consider that to be skin in the game.

Hire a lawyer to draw up a contract that suites you both.

The briefest answer is that your friend should get with a lawyer experienced in commercial real estate contracts.

But do get a lawyer because if all the tenants band together and get a lawyer you're better off with a lawyer.

As an added note, I came across a blog, by Michael Thiele, a Residential Landlord and Tenant lawyer in Ottawa: http://ontariolandlordandtenantlaw.blogspot.ca/?

So, in the planning for acquisition, you would want to have sufficient funds available to finalize that course of action (i.e. lawyers, advertising, recordation, and other misc expenses). 

as with any advice, im no lawyer...so, CYA, call your attorney!