Specifically, the cost to have it corrected is now a known material fact. 

I’m looking to ensure I structure things correctly and attract the right partners.

Just food for thought.

I'd estimate your cash flow after you pay the loan payment would be $600-$800, which a lender that understands investment real estate should give you some credit for on your DTI.As for a bank, I have a specific lender at NBI that I would recommend.That 600-800 you are factoring in the HELOC repayment each month too, correct?  

If my crystal ball is correct, we are going to see a lot of these sub2 deals hit the fan in the next 36 months. 

Bruce you are 100% correct.

Hey @Eddie Gonnella, @John Underwood has it 100% correct.

I would also send the tenant information about food pantries etc in the area.

This is correct, so I would disclose every aspect of the sub to and how it relates to the seller, perhaps going so far as to insisting the seller sign off on an acknowledgment that he understands the ramifications.  

@Chad Urbshott Correct, Olympia Trust is one of three places mentioned to set up a trust.