Option 2 is to form a new entity naming you and your buyer as owners of the entity.

My idea is to present them with two options: the first would be to form a partnership with the seller with which to purchase and rehab the property. 

Some example pro formas?

Be skeptical of numbers in a listing or prospectus-pro forma! 

I totally think you should have a general understanding of underwriting to evaluate how realistic the pro forma is.

Legally speaking, you guys would form a partnership to own the property.  

It does no good to place capital with a sponsor who has an attractive pro forma to find out later they can't be trusted.

I've made a few of my own pro-forma type tools and budget and building programs in excel, but the bigger pockets printouts look a lot better than what I can produce on my own.

That pertains to buying more real estate especially an investment property that requires reserves and a DP that comes form a liquid reserve unless the lender allows for the use and the calculation of DTI with the new payment is within approved ratios.

However, I highly recommend that if you use this strategy, you form a rock solid team or you can run into some major issues.