Or can his in-laws still retain their Section 8 status and their apartment with my cousin's LLC being the landlord?

The ultimate point is to be open to creativity in structuring deals and consider open dialogue, with the goal of retaining your good tenants.  

It needs a major retaining wall in the front and back of the property.  

But if you are selling anytime soon (3-5 years or less), I would recommend retaining the 4 plex to tap the larger pool of buyers, easy financing and better marketability. 

Is there a good way to structure this deal so they don't retain all ownership in the house and land.

I'm going to rent it out without the garage (which I will retain for extra appliances/tools/countertops etc). and it should cash flow $500 per month after PITIHOA.Because most of these units are so new, and many have HOAs, my budget for repairs is lower than many people on the forums experience.

I have searched unsuccessfully here for a good article on how to structure a partnership with the family investor that ends with me paying him back in full and retaining 100% ownership.

I would go with that if your ultimate goal is to retain ownership and have the largest equity share.

For the duration of her life, grandmother retains a "life estate" and the sole discretion to dispose of her ownership without permission/consent of the remainder beneficiaries. 

I think a live in flip would be the best option financially as you will at least retain your capital.