Perhaps we "buy" the house from them for the $328K balance to satisfy the lender and don't need a large down payment and then have a separate contract with them to pay $x per month until we've paid the full $172K amount.

It is somewhat complex to try to explain on a forum, but at a high level, you (aka GP) and your family member (aka LP) would agree on how much the 2 of you would put in for the amount of equity needed (usually expressed as a %).

Well, of course it depends on the individual circumstances, the amount of time comitted and the capital available.

The IRS doesn’t allow both parties to claim the same interest amount, so clear documentation is critical.This post does not create a CPA-Client relationship.

My second sheet would start with the amount of capital you have to deploy.

With current interest rates, and they are at least 1% higher with potentially additional points for non owner occupied property, it is hard to find properties that will allow for positive cash flow after paying the mortgage, if you are looking for money for the down payment from a private lender, those are normally at higher than market and I am not sure it would be possible to pay it off.... please remember you need to take into account that you may not have a tenant for a certain amount of time, a tenant may stop paying rent, or you will have a big ticket item to fix, so I would wait if I were you and save to have enough for the down payment and closing costs and perhaps some money set aside for repairs. you also want to make sure that you have your own emergency fund outside of the money needed for the investment property because life happens ....

A net listing is a type of real estate listing agreement where the seller specifies a minimum price they would like to receive from the sale, and any amount over that price is considered the real estate agent's commission. 

Temple Master Plan As a recent temple graduate, I can truly say that the temple area still has a large amount of room to grow.

I have another rental property with a good amount of equity.

Next Step: With with sparkies quote, I'd get that quote over to sellers and with an amendment all written up ready for there signing giving me a credit at closing for exactly that amount.