His intention is to help.

At that time we could renovate the ground floor apartment and potentially turn it into (2) apartments for a total of (5).My questions come down to how do we deal with the existing 40k mortgage, whether we can make it work so her parents aren't paying much in rent, if anything at all, and whether or not we set up any legal entity, like a trust to help the legal situation of paying off her sister down the road. 

Any advice on educational courses or material that would help me learn multifamily as someone just getting started?

The reason I ask is that knowing the fast movers of the area may help you choose your project.Lastly, what kind of renovation budget have you established, and is it an upfront budget, or will you be contributing to it over the time that you live in the property and renovate it? 

Any insights would be incredibly helpful!

I'm trying to be specific and helpful for the question posed by OP, for his particular situation.

If you're helping me fund a section 8 SFH, then no.

Hope this helps and congrats 👏 

This is really helpful.

I hope that helps some.