This means that someone who makes $43,000/year would now eligible to buy this room condo, and have access to a vehicle through which to build equity in an asset as an alternative to paying rent. 

If you used a loan to rehab your property and find yourself in a difficult position, doing a straight refi (just paying off the old mortgage) will be easier than trying to pay off the original loan and take additional cash out.

Not really sure how to go about financing but we're planning on having a down payment at or slightly above $100,000 and don't want to pay more than $3100ish per month. 

They have no cash to qualify for a rental or even pay for the move. 

You can buy a 250k property with 25% down and pay about $1600 in PITI, or 350k / $2100.

Investing OOS for the first time, and using a TK provider for the first time.I understand I'll be paying (significantly) more for a TK provider home.

Who would be responsible for paying this?

And it can work really well for you as long as you pay attention to the statute requirements.In order to defer all tax you are selling investment real estate and buying investment real estate of at least the same value you sold. 

https://www.treasurydirect.gov...I know you asked about cd's , but the IBond is currently paying 6.8%.

You can structure the deal to pay him gains at a zero federal tax rate.