It is in a very desirable location, clean and livable, but needs to be updated.

@Mikhail FedorovI salute your desire to start investing in the MFH.

Most urban areas have less desirable areas and typically lots of abandoned homes.

I think many people have a desire to own their own place, but the happiness goes away really fast when the place needs a $25,000 roof, of $30,000 worth of plumbing work, or whatever and then the tenant leaves, passes away, or whatever.

No matter what you invest in, you need to determine your goals, desires and risk tolerance.For most investors who aren’t empire builders, I believe in a few hard and fast rules1.

We've done a few drive-by's in desired areas but beyond that, most online listings seem to be a bit overpriced for our evaluations. 

I would essentially have the same mortgage amount as it is today, I get my desired cash (without financing), allows partner to finance versus coming up with $225K cash, and in return give up 50% of the house.Is this a make believe scenario with legal and lender issues, or is it viable?

I presented 3 options;1) 300K @ 5.7% /30 Years with 10 year ballon if desired by him. $1556 month.2) 320K @ 5% /30 years ...........same...............3) 350K @ 4.15% /30 years ........... same.............It comes down to what his cap ex tax rate is vs in ordinary income tax rate.

This is certainly an option if we can find a house in our desired area.

Maybe even advertise the property, if She desires.