I am trying to find a way to make this dichotomy work where both parties can profit. 

Proper planning will protect both parties, maximize tax benefits, and make your venture a success.This post does not create a CPA-Client relationship.

I have people ready to give the funds, I just don’t know what’s the best set up that makes it fair and attractive for both parties.

And contracts with the 3rd parties they work with redistributing liability from them to the third parties. 

In any disputed court action where the court resolves the dispute and determines the prevailing party, the court shall also award to the prevailing party its reasonable attorneys’ fees and costs and the non-prevailing party shall be liable to the prevailing party for payment of any court awarded attorneys’ fees and costs.

You owe your counter-party a standard of honesty and transparency - be sure they understand that you are an agent, but don't represent them, and are looking at their house as a for-profit investment.The pros and cons have been discussed endlessly on BP.  

Finding tenants to pay your bills is the hard part. I

In terms of structuring the deal you can do it however you want as long as it is legal, ethical and agreed upon by both parties.

As far as benefit to the seller goes, @Matthew Paul I think you are probably right on the money and regardless of whether they would have preferred to stay in this house rather than move, it is likely providing them some excellent cash flow; and I'd be hard-pressed to come up with a deal that serves both parties better than the current situation. 

Before any mediated settlement is binding, the parties to the dispute must agree to the settlement, in writing.