It's great for you to have the skills of tax accounting in this game. 

It can't all be fun and games!

If they will sell the note and she will quit claim deed her interests it's all a numbers game.

Hi Everyone - I've been investing in stocks for years but I'm new to the real estate game.  

Feel free to give me a buzz if you want to chat about how we structure things.Remember, the game changes greatly when you can do houses with 100% other people's money.

@Alexandra Gortchilova you might want to consider crowdfunding platforms as an opportunity  to get into the money lending game.

Since this is a numbers game, the only way you can answer the question is to do the following:Establish a relationship w/ a realtor winning to run some comparables for you showing the potential value if you convert from a 2 flat to a singleIf the values are not significantly hire than your mortgage then hold on to it as a 2 flatIf the values are significantly hire than your mortgage then get some estimates for converting from a 2 flat to a single.  

Of #1-3 I prefer #1&2 over #3 as I feel the provider has more "skin in the game" and their compensation is better aligned to yours as the passive investor.

insurance policy is a good way to go.I have been in this game for 40 years and never even came close to sniffing a lawsuit from a tenant.. but of course the very day I say this you get sued..

Spend time on the forums to get a solid grip on the real estate game.