The homeowner is literally creating equity in the home by doing the work and that subsequent work is being financed through the loan.....thus getting the cash needed to do the work.

yes this would only be possible if by some very stroke of luck one of your local community banks held the note in their portfolio.if its a big institution then the loan has been sold and sliced and diced and you will never be able to purchase it.. its a 1 in a 100 shot but worth taking all you have to do is pull court records and see who the bene is on the mortgage and any subsequent assignments.. if it ended up for instance assigned to MERS then its gone.. it will go through the system.

I took my foot off the gas since the realtor said the sellers attorney would handle the negotiation and subsequently the process seems to have slowed to a virtual crawl.

These subsequent years, I have been cause I don't want to get myself in legal trouble because I am honestly, intimated by her lawyer connection. 

You can either each buy a representative tenant in common interest (TIC) in the property, and then subsequently (many different opinions on how long this period has to be) each contribute your TIC's into a new LLC.

Some will do loans now but want reserves.I can see areas for houses that were never meant to go up and are crap hole areas to crater pretty hard in about 3 to 6 months.

In each subsequent year, the seller will pay capital gains tax on 50% of the principal he received from you, plus income tax on any interest you pay him.So, in your case, the seller will pay tax on the gain included in the down payment you make in 2020, which will be due in April 2021. 

Most likely you will be inclined to not treat the cash movement as a loan because of other administrative issues ( such as interest calculation and interest income to the LLC) If you dont want to treat the movement as a loan, then those cash movements would most likely be booked as distributions to a respective member of the LLC, ( husband in case husband's LLC), and the subsequent capital contribution from another member of another member to LLC ( wife's LLC).   

I had at one time 350 SFR's I built them up in 2010 to 2013 and sold out.. and the guy I sold to could not make a go of them.. he cratered I walked with 7 figures.. it takes a certain mentality and skill set to run hundreds of C class.. he then went to Pittsburg without me.. because I did not know that market and bought another 50 to 75 homes.. and those all cratered you may have bought some  LOL or your clients did for sure..   

My wife and I attended the live training in Scottsdale 3 years ago, along with several subsequent meetings and national conventions.