Basically an annuity with 1mor both parties being amateurs.

So if I understand sub to, you're basically assuming the mortgage.

Haven't updated this post.House- basically done. 

In order to pitch for funding, we feel like we need to get a few basic ducks in a row.

Hawaiian real estate law differs from other western states significantly, mostly due to its monarchal heritage and the Bishop Trust influence.The basics are the same as would be in California; determine the condition of title ownership (individual(s), estate (including conservatorship, if appropriate) OR fiduciary acting for trust.Use a qualified private money equity lender to make a loan sufficient to buy out the cash-only beneficiaryThe legal community in HI and Big Island in particular is small.

How  do i know the contractor not cut corner, the seller refuse to disclose the scope of work done, and the contractor said he won't reveal it without seller permission, so they are basically say we won't give you any information beside invoice, other figure it out yourself with your own money, we don't' have obligation.

Thanks again, @Tyler KeslingI love your enthusiasm, but you need to be careful about being so enthusiastic that you ignore the basics.  

Umbrella insurance can be a smart way to shield yourself and your partners from potential risks that basic policies might not cover.From what I’ve heard, local insurance agents familiar with investment properties in your area are a great starting point.

I ran some very basic numbers on option 1 and if you can get a ST/MT rental per your comments and other assumptions you list, this could be a deal for you.

Basically, the further you get away from the city the more potential for cashflow, but you're also dealing with a different tenant base that may be tougher to manage.