First are you raw water cooled or using an heat exchange?
In a raw water cooled engine the cooling water exits from the exhaust manifold to a anti-syphon valve then to the exhaust hot section, then the water and exhaust exit the boat.
With a heat exchanger the "raw water is circulated through one part of the HX" then to the exhaust as above. The coolant circulates through the engine then out the exhaust manifold to the HX (to give up it's heat to the cool raw water) then back to the engine.
Yes black pipe is most cost effective. There is also stainless steel available at McMaster Carr for a price. Both will need to be cobbled together and it is easiest to use the MMI water injection section available to avoid welding or brazing together a fitting.
Dave Neptune