@Chris HeinmillerA good portion of land at tax sale is unbuildable or does not have utilities.

Might be a good idea to see if you can get equity financing on a small portion rather than the whole thing, to keep payments as minimal as possible.

I will also take your advice and speak with a lawyer on that portion.

Her mortgage would be equal to 1/4 of the mortgage and then I would rent the other units to cover the other expenses and my 3/4 portion of the mortgage. 

Best to work with a lender that can do both the fix n flip and refinance at good rates, typically a hard money lender will have much higher rates on DSCR portion than a DSCR lender. 

Since I kind of messed up with not noting the issue sooner, I'm going to be accommodating and waive late fees and set up a payment schedule over a couple of months to make up the lost rent.... but I'm not eating the full $$ or even a portion of it.

Last Month's Rent is often not allowed under these programs because the program is guaranteeing the funds (or portion thereof).Otherwise, stick to your qualifications and screening criteria. 

Sale Price: $525kPurchase Price: $325kMortgage Left: $268000Estimated Gains: 224kMy portion of the gains (after 50/50 split with wife): $112,000Questions-Do I have to purchase a home of $525k with my $112k or simply a home of $112k or higher? 

A portion of the monies the tenant gives me pays that down.

Start there then move portions of your money to where you feel you’d like to take on more risk.