The contract shouldn't affect your basis, that will be based on what you pay for the property (unless there's some money changing hands outside of closing, which probably wouldn't be documented in the first place).

The loan application will ask about the assets you need for the purchase (down payment, closing costs, and reserves), and you will need documentation for those accounts (most recent statements). 

@Jerome MorelosIt will be similar to what you sign with a bank, there will be a note (which is the iou which states how much you can borrow and at what terms and length)Then there will be a deed in trust (assuming California) which is a recorded document that uses the property as security.

Based on the details from the clerk of courts, it appeared that the investor was attempting to hide assets and refusing to turn over documents, one of which was copies of all renovation agreements. 

Do a GOOGLE search, get the tax information, read through any relevant documents the seller has provided.  

The key is making sure you meet the material participation requirements and properly document everything.

More time/paper/brain burden than financing with a local bank.Seller needs to have better documentation and cleaner books generally.

We also can't have renters dealing with the humidifiers as it is a mold problem/foundation issue if it isn't taken care of.We are taking pictures and videos of everything, we have multiple professionals that have documented everything (and told us to lawyer up) and have neighbors that we have already had agree to discuss their drainage problems when we get a lawyer.  

This document will memorialize the terms of your agreement, what your fee is, what your involvement will be, and dates for everything.

In the incorporating documents, I put my trust as the owner of the LLC.