However, we (wife and two kids) own this 3rd deal and want to keep it as our permanent home.

Good question - when Bigger Pockets leads reach out to us via out of state, we first define your specific goal with the BRRRR and talk through specific cities/areas that could lend itself to accomplishing that goal.

Awesome to hear you are in our market, we have a lot of clients who invest both out of state and in-state like yourself!

I am thinking it wouldn't be that much different than being out of state outside of the time zones.

Not only did Detroit beat every city in other popular Midwest states like Indiana, Missouri, Ohio, Wisconsin, etc...Detroit beat every city in the super popular states of Arizona, California, Florida, and Texas - Detroit beat them ALL!

Given the renewed concern of fire following LA’s fires and the potential insurance consequences, we have begun discussing the potential of reconsidering owning in the area. 

Michael Dumler nailed it when he stated they are all getting the same data and from the same places.It is critical that you know where and when the data has come from.

Also, I believe they own this property out-right, no loans, etc.I'd like to structure a deal where they provide seller's financing with a 2-3 year off-load timeline that gives them a) some cash now via a down payment and b) some regular monthly income all while I work to bring rents to market value and we both benefit on the sale and refi.How would something like that work and what would it look like?

The quick answer is no, but best to read this article as various states have certain requirements: https://www.zillow.com/learn/do-i-need-an-agent-to-sell-my-house/

Sometimes you will get a seller who comes back and declares they want off of the loan, or a nasty letter from an attorney saying that you ripped off their client, or a letter from the State Attorney General that you get to visit them in their office.