When in the redemption stages of notifying the investor who purchased land for taxes on land that has a structure. 

If you don't have money for a down payment you can always structure your offer with the seller paying your closing costs. 

We were discussing how we wanted to structure it the other day so any advise would be greatly appreciated.

The contractor (whom has great references and works with investors in the area and is an investor himself) said that the house has great bones and structure.

Seems like this method gives you a better chance at being successful.

I would like to get your opinion on how to structure our specific scenario: we plan to purchase property with cash (using private $), my fiancé will live in it during the flip (~ 8 mos), then we would like to keep the property as a rental, but pull as much cash out as possible to pay her Dad back including his profit.

Presumably the ink will be from Manager of LLC2, the duly authorized member of LLC1, but there could be several ways to structure this. 

They would be entitled to 3/5 of the cash flow, and the developer would likely have their fee and also promote waterfall structure where upon hitting certain returns, their % of return in increases.

Also we are thinking to add additional floor space in the roof, if the structure allows for it. 

As for HELOC to pay off your mortgage, the concept really caught my attention, so I did a lot of research and ran various scenarios using an amortization table using the HELOC method vs making extra payments.