So, as long as you qualify for other kinds of loans you should be ok in a worst case scenario.

Either of your scenarios can work.I believe that @Beth Johnson makes these loans and might have something to add.

I’m not opposed to putting more down to increase cash flow also (COC return suffers of course and there’s an opportunity cost to having that trapped equity but it can make sense in certain scenarios). 

What scenarios do you see options for?

Roots are very common in cast iron as it slips in between the joints.

FlyhomesFlyhomes offers a lot of flexibility when it comes to buying and selling your home, and the worst case scenario is that you end up getting the appraised value for your home rather than the fair market value.

The most likely scenario is that you refuse to pay him, or make him an offer he doesn’t accept, and he files a mechanics lien on the property. 

Is that common?

imagine the same scenario but your friend is a single investor and you’re a married owner occupant. 

You can do a 1031 to a TIC (tenants in commons) with your MIL, where you will both own a proportional share in the property.