Stay in and be part of this 721 or lose my investment most likely.

When one machine goes down you start losing money in a small way. 

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This would be my first real estate investment, making the decision even more critical.I understand that backing out would mean losing the $2,000 earnest deposit.

My broker advised me to "bite the bullet" and close the deal, telling me that I should be glad I wasn’t losing money on the deal.

You have the most to lose now since you'd be out all of your investment if the FC goes ahead.

So - somewhere 2 hours away, or somewhere you like to vacation in, or where all your family lives, or where you plan to move someday.Too many people are trying to do exactly what you're doing - pick a market based on a formula - and they end up buying a random 'cheap' property thousands of miles away, turn it over to people they've never met or even spoken to, and then... lose money.  

If the 1st then goes into foreclosure, you are in deep trouble, you have to pay it off or lose your money on the 2nd AND lose the property. 6.

If you put the house in her name and you have siblings or other folks who would have a claim as a direct heir on her estate, you run the risk of losing the property to another heir. 

Quote from @Matt Meier: If I were to do this, wouldn't the lender lose out on their commission?