When future expenses come up (taxes, utilities, etc), I cut a check for 50% of the bill and my partner cuts a check for 50% of the bill.So my question: if my partner only wants to contribute 250k and no more, can a TIC agreement be structured in such a way that percentages will change as expenses occur?

That's both very common and absolutely allowed under 1031.Once you complete your 1031 then you can work with your accountant to contribute the property into an LLC entity if you wish to own ongoing.

The money that your friend gave you is his contribution to the partnership.

House hacked this property using the 203k loan that kicked in $29k in renovation costs and I contributed $39k cash out of pocket.

So if the sponsor contributed 10% of the capital, the distribution in the pref and return of capital tiers would be 90/10.  

But as you continue your wealth growth the Solo 401k can sometimes offer you a leg up in certain areas like more aggressive tax-deductible contributions, avoiding Unrelated Debt Financed Income tax on leveraged real estate, among others.You're in the right place for getting excellent help from your community and experts.

Is it the contribution from the new owner that is recorded with a step up value?

Reducing my living cost has definitely been the biggest contributing factor to a high savings rate.

I am wondering if it's better to LOAN my LLC start up funds or CONTRIBUTE them.

If not, yes you will pay penalty and ordinary tax ( not on your contribution) You only pay tax and penalty on the earning on your conntributions.