He is paying a rate higher than a bank but lower than hard money and he can refinance after his equity has increased. 

Since they are your parents I feel creative financing is the best way to pay them over time.  

I'm happy to pay wholesalers to bring me deals.

@Karolina Powell I’m a huge fan for tenants paying their own heating.

OPTION: There's a real knowledgeable member Ken that posts about Subject-To deals that you might want to connect with and even pay him to mentor you.

Currently, I am paying $942/month w/ $232 of that going towards my principal.

Both of those models involve potentially comprehensive rehab to make a good return and new investors often hire the wrong people and spend way too much.Higher returns on her money can be found in debt fund syndications which are totally passive and can pay 12%.

Also, could anyone give me a little more information on what I might expect to pay in price per foot for this type of construction in Anchorage? 

They are currently paying $1050 and the current market rent is $2000.

Many W2 jobs in the USA do not pay enough to support a family with one person working, or even with two persons working.