Network at RE meetups and get to know others who do what you want to do, get tips and tricks from them and learn about the mistakes they have made.

That is the mistake so many make. 

However, you would have been making a huge mistake even before you would have refinanced...assuming you could have.The words, Lease Option, and rehab should NEVER be used in the same sentence. 

What’s the worst thing that can happen, what’s the likelihood of that, and what’s can I do to safely reduce that risk.

@Julian Colvard before jumping to the worst conclusion find out how this has worked foe them in the past.

Then they're out of the picture and you can make mistakes on your own dime/time and not affect the family dynamic.

It will make things less risky for yourself starting out as you gain experience pile on the risk because you know how to avoid costly mistakes.

L/Os would allow offloading both responsibilites to the tenant buyer, for a discounted sale price.L/O tenants can be evicted instead of foreclosed on in the worst caseDownside is not being cashed out right away though.How do you guys usually exit your foreclosures?

In our experience, the #1 mistake landlords make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

I think leaving $200k on table is a huge mistake.