Any Precautions/hesitation that you guys have to this?

What precautions should I take when dealing with the current tenants?

You should take every precaution legally to protect your family members money.

A few large business purpose loan companies were requiring the investors to own a primary residence as a precaution after they did some loans owner occupied loans with non-owner or non-Dodd Frank guidelines and got burned. 

Which is why we are trying to do what I described above.But if it may have some re precautions to do what we are trying to do, just like what @Don Konipol mentioned, I guess it was a good idea to ask this question in here.

What precautions or due diligence needs to be done to ensure protection of the financier and me as the buyer?

What other precautions or known 'pitfalls' should we be aware of? 

Rehab projects can offer significant gains, but they can also present unforeseen costs if you do not take the right precautions.

Now most of us don't have to be as thorough as him (he was hunted by Spanish authorities for a while), but there is a lot of good info about keeping your home address hidden, how some private investigators found seemingly impossibly hidden people, and horror stories about people who didn't take some basic precautions.

However, I do agree that this side of town requires more precaution.