However, a lot of concerns can be mitigated with looking at their past rental behavior in a lot of different settings.

Look into asset classes with stronger cash flow, such as small multifamily properties, short-term rentals, or mobile home parks.

The reasons cited for the market not following suit this time are concerns that increasing GDP, especially in Q4 of 2024, and policy changes such as tariffs could lead to a resurgence of inflation and thus a change in the Fed’s projections, with there being 150bps of variance between certain Fed members projections (Source).

Would the 9-year balloon concern you, knowing you'd need to refinance or pay off the balance at potentially higher market rates in the future?

I have sold some properties years ago on lease options where the tenant buyers actually exercise their right and purchased the property. ( I was in the deed.)The reason I am concerned to tie another person’s property up  with the lease option is that people can change their mind, as in the seller.  

Why even concern yourself with the legality if it’s self serving and harmful to your family member?  

I would be very concerned about someone holding the 50k deposit for finish work at the end..

It does not mean that they are not legit, but it is a concern. 

My biggest concern is managing additional units and tenants.

Budget these carefully into your overall project plan to avoid surprises.Rehab Budget: Ensure that bids are received from multiple contractors and that adequate reserves are made for cost overruns.ARV: Be conservative on your ARV since the appraisal concerns one person’s opinion.