They have more skin in the game then you do.Make sure you get clear title.

Tax on the payback of the loan in 2 years is the only drawback but the 10% at the end will soften the taxes you will pay.Make sure they have skin in the came also. 

You May have to share a % of equity with him but he will have real skin in the game then. 

A true TK will have their own PM team.... full skin in the game. 

Purchasing an investment property increases the level of difficulty of your tax return.Purchasing a house-hack is even more difficult.To make it even more difficult - you plan to make improvements so you have to determine which costs are currently expensed and which are capitalized.Not only have you acquired an investment property but you also acquired a personal residence.As a result, direct expenses towards your investment property and indirect expenses are deductible business expenses that can be used to decrease your net income from rental activities.With all that is said - you are trying to operate a business so I would hire professionals to help you with your tasks.

during 2008 there was no such resources as BP.. everyone was out to save their own skins.. banks were failing .. etc

Con - difficult to sell, most houses need work (or total remodel) and a potential difficulty finding good labor help.  

They'll want you to have some skin in the game (~15% of purchase + reno) and you may have trouble if you've never done a flip or BRRRR before.My gut tells me this doesn't work as a BRRRR, rent is too low.

How difficult is to get a mortgage on a property that you own outright (assuming your current credit and debt to income ratio is good) and then convert it into an LLC after the mortgage is in place? 

The family had foreclosed on another home in the past and couldn't get a mortgage, so by structuring a 3 year lease option, they rented from us but treated the home like it was their own because they had skin in the game ($5k deposit and paying slightly above market rent rate).