Talk to a trusted lender (preferably local) about what loan options are available to you.You can absolutely find some solid SFRs or even multi families around, but the cash flow on many will be lower the first few years, unless you are willing to do some value add work or buy in distressed areas with less expectation for future appreciation or price stability.If the goal is to have value down the road to cash in for a pivot, don't forsake appreciation for maximum cash flow.

I’ve got a lender who is a problem solver and loves geeking out on the minute details of these problems (it’s what makes her a great lender) and she could be a great resource for you...she’s put together condo conversion workshops with experts all talking about their components.

I know a lender that can help with both states that does investment lending for very cheap, it would be worth a connection as you look to build out your team no matter what you decide.

I have heard it used different ways.I have used a version of gap funding where the hard money lender funds 85% of the flip (purchase + renovation) and the gap funder funds 10% of the deal.

I have lenders in place.

So even if you had a buy out agreement negotiated up front and execute that buy out agreement, the bank would still require him to be guarantor unless something drastic changed on your side financially.The best scenario here would be to purchase and rehab the property using a hard money lender or bridge lender.  

When they decided to inquire about the rescue fund they left me out of all of it then threw me on a call with the lender, rescue fund, an attorney they hired for themselves and a few partners.

It could be helpful to you (lenders will want to see lease agreements) and it is good for the family member (they actually could do a program where them paying rent increases credit). 

WIth the new FHA & Fannie Mae legislation, many lenders are forecasting the rental income from additional units, even if they're not a zoned duplex.

I have seen some exceptions with bigger lenders.