Does anyone else have any suggestions for the course of action?

You  will  need the help of an attorney and account the question to ask  to be able to do the creative structuring  of your partnership  with a plan of action  a organized  plan of action and  aware  of the pitfalls  and opportunities  just doing this with family will not  be enough  you will need  professionals who know the laws  of syndication

I'm not saying what she is doing is right, but if you take action like cutting the cord or removing the washer and dryer, she might just up and move on out.

That's the kind of action that gives all landlords a bad name.

I cannot speak to the Fortune Builders program but I do see considerable value in finding the right coach/program to help you to action against your goals. 

Let the ARV be the filter, not how much they owe on it.Excited for you taking action, don't want to see people lose their shirt on deals because of something simple. 

We intend to fix this house up a bit and flip it, I just didn't know what kind of actions mortgage companies might take if you are behind on payments but continue to make them every month.Any and all advice is much appreciated!

It sounds like you have gotten a good start of learning before you start bur sooner or later you do need to take action.  

If the leach field is on your property then you might be able to take legal actions but this will make things worse. 

They will be able to tell you if permits were pulled for the fence and shed, and they have the authority for corrective action.