We've talked to our friends briefly about owner financing and they're amenable to it, but I really don't know anything about how to structure this type of deal and I'm looking for any type of suggestions from people that have done this.

I can refer you to someone who is if you need advice on how to present and structure this. 

Any pointers on how to structure this?

The Zone A area comes into the property, but not onto the structure itself.

The main concerns with a house built before 1900 would be structural and sewer.

I wrote 2 posts that I think might be helpful to your questions here - The one on delayed financing (and how to structure your deal better) can be found HERE.The one on what questions to ask lenders (and how to find the good ones) can be found HERE.Let me know if you have any other questions. 

I was most afraid of buying a property with major structural or foundational issues that would sink me financially.This property was actually an off market property to begin with that would not pass city inspection when we first saw it (at least on the side I am living in).

Profit split returns are where the investors literally split the profit from the sale of the asset according to the structure outlined in the contract.Here’s a great example, using round numbers for ease.

And if so, then does it make sense to structure a deal such that you’re less cash flow positive in higher tax states? 

I now really want to BRRR the property...Is there a way to structure this partnership so the other investor would still want in?