conventional mortgage vs 401k money to buy a flip

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Input greatly appreciated.....

I have cash to fund the rehab portion of a partner now wants to buy the property with a conventional second mortgage that she has already prequalified for.  What are the tax ramifications of her giving me 1/2 the profit since the house would essentially be in her and her husband's name?  How difficult is it to find a good deal when you can't buy at auction with cash and you have lost the all cash leverage of making an offer on a preforclosure?  Wouldn't getting a home equity loan be easier than a conventional mortgage? Thanks for any and all input or advice!

Yes we do and that was the original plan but my partner has now decided she doesnt want to use her's by  transferring it to a self directed 401k.  Therefore, now she just wants to get a conventional loan but I am very reluctant to continue  with her doing that as it cuts out the leverage we have in making cash offers and competing with all the other rehabbers in the area.  I have been looking at tax foreclosures and am considering writing the owners and making them a cash offer with the cash i have before the properties go to auction.  Thoughts?