QUICK UPDATE:  The property I was looking at ended up selling to someone else.  

At end of day if market isn't where rents are in this building those numbers should have a bearing in your analysis too.

On an 18-month loan this creates an APR of around 2% (assuming minimum payments then balloon payment at end), although they tell you it's 0%. 

Concerning your stated goal you  seem to be working at ends against yourself.  

We'll assume the $84k assessment.Cost (AP + rehab) = $70k75% ARV (for refi) = $63kCash left in (lost)   =($  7k) lostRent          $1050/monthT/I                  395PM                 105CF/Cash   $   550/month75% Loan $  320/monthNCFL        $  230/monthLost Cash at REFI         $  7,000CF Recover<refi                3,300CF Recover>refi                1,380Net Lost Yr 1               ($   2,320) lostNet gain at end Yr 2     $      440/yearNG after Yr 2                $  2,760/yearThis is assuming all goes well, and you get a tenant in ASAP.Me, I don't like the numbers.  

At end of first year based on comparables, I believe it can be sold for $180k. 

if you pay cash, get a receipt for the recipient  AND get them to sign a W-9 and give them a 1099 at end of year.If you get audited and don't have a signed W-9, YOU could be subject to paying the taxes for the person that you paid, its called "back up withholding". 

Be very carful how you structure your financial relationship as marriages have a tendency to fail, as with many partnerships, and you need to protect yourself. 

My wife and I take turns as mgr, in complete control, and receive k-1s for tax purposes at end of year.

Say $100k property, $25k down payment, appreciation first year is 3.5%, so at end of first year property has increased in equity $3500. $25k/$3500 = 14%.