Are there risks or hidden costs I might not be considering?

In many markets section 8 is higher than market rate. and investors need that extra return to mitigate the risk of sec 8 tenants generally speaking.

I have considered doing a TIC/coop in San Dego but have the belief, without any data except for how I would value the financing challenges and tic risks, as being much greater than 10% price difference from condo price.  

You could also try to find a seller who wants to do seller financing and take a risk on you, which would be challenging to find.

Taylor sent multiple email inquiries to our insurance provider asking what risks their policy covered.

Now I'm really torn, but think it just has to kill it for the issues of risk.

I also wouldnt let your mom go into 2nd position on an investment property with any sort of restructuring; it doenst sound like she's in a position to risk being wiped out.Overall, though, if you want cashflow on the new property but cant achieve that after a refi into a market rate loan, it probably makes more sense to just flip it, pay off your heloc and your mom, and use the remaining capital for the next deal.

This is verified based on the good schools, department stores opening up (Costco, Target etc.) as well as verified investment from Jerry Jones (Dallas Cowboys owner) and the city to grow the population.

They financed 100% of that transaction, and I took on a huge loan - a huge risk for a broke guy like me.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage.