It was perfect to lease out the bottom our first year, which covered a substantial portion of our $1,800/month mortgage, but we recently had to 'boot' the tenants downstairs so that we could take over a couple of the rooms (baby number 1 on the way and I needed to move my office to make room for our little guy - crazy how time flies and space requirements double ;-) ).The hot Colorado rental market got me thinking.  

I have been around real estate for many years, but have been active in the financing portion of it.

If your mom is to help you out by providing {a portion of} the down payment on a property, it would have to be a "gift" (with no expectation of repayment) to appease the lenders.  

If you're on the mortgage, you almost certainly have to be on the title and own a portion of the house, not the equity.Additionally, I don't see why owning two properties would disqualify you from getting a loan.

If Target decides to lay off 10% of its workforce, that doesn't remove a substantial portion of customers from its stores and is a pretty direct boon to its bottom line.

The "non arms length" portion of this idea concerns me.Any other suggestions?

Surprisingly, no one offered or request me to consider seller financing all or even a portion of that free and clear house.

The duplex portion is in good repair and currently has tenants, but the attached home has been vacant for a number of years and it shows.

Another option is to get a home improvement line of credit for the rehab portion, which would be separate from your purchase loan.

depending on the size of the home and the scope of work being done to rehab the existing portion, it may not be that out of line.