"Do you see what I see?" Oh no, is right! The execution of this hot water heater and furnace venting is extremely dangerous. The exhaust for both units should vent UP and OUT. This configuration will cause the furnace exhaust to feed back into the house along with the hot water heater exhaust. "Nothing good can come of this."
Do your friends & family a favor... Check with local professionals before doing work in your home or before hiring a contractor to work in your home.
Consult with a local real estate agent or a home inspector. Seek advice from contractors like your local heating & cooling expert like Harmonic Heating & Air Conditioning. Or even your local plumber, electrician, or home air duct cleaning service. Most "QUALITY" contractors work together, refer each other, and know the quality of others in the area. Its well worth the phone call.
Have a SAFE and HAPPY HOLIDAY from your Friends at Harmonic Heating & Air Conditioning.