You have very little risk with this arrangement (it doesn't appear that you are contributing any money) and have several profit points.

I just had an hour phone call with him on Tuesday asking how I can contribute.  

We are hoping to learn as much as we can and be in a position to turn around and contribute to the community.

Other things can also contribute to raising your rate - if you're increasing your loan amount, you might be increasing your LTV, and therefore getting a higher rate or higher pricing.  

While I don't know much, I hope to help and contribute as much as I can!

I look forward to contributing to this amazing community that has sucked me in over the last year.

Or better yet, since you don't know what the market will look like in a few years, you have a few options: (1) you could form an LLC where you are both members and you get an interest based on the value of your contribution, i.e. finding the property, managing it, etc. with a buyout right after the 5 yrs; (2) You can just own the property in your own (or your own LLC's) name and use the investor strictly as a lender, pay them interest or P&I monthly and balloon upon sale, just like a conventional lender, or (3) if the investor wants ownership, you can either take a salary as manager and just have an option to purchase in 5 years, or a right of first option/refusal if they want to sell before then.

Specs: $40K takeover (including seller fee and delinquent balance)Loan Balance after 40k contribution is $187K.So is the sales price $187K, $227k or $227 (minus the seller fee)Thank you in advance and your advice is greatly appreciated! 

Partner A purchased 1 property (A is the only person on title and mortgage) Partner B purchased 1 property (B is only person on title and mortgage) Partner C purchased 1 property (C is the only person on title and mortgage)We have agreed to split income and expenses equally (with an equal amount of capital contributed).

I would simply line out an equity split that matches your % cash contribution.