Sounds like amateur hour to me.

Sounds like a nice story with a happy ending pending, but Dave would not approve.

The idea of going the route of small multifamily sounds like it may be a better route than a single buy and hold for my family.

You can find videos/articles online on how to get the basement dry, but the basic process is: 1) turn off all electric to the basement (to avoid electrocution from the water), 2) run pumps to get the standing water out of the basement (sounds like you're already doing this)3) remove all furniture and items from the basement,4) once you've pumped out the standing water from the basement, rent a wet/dry carpet cleaner/extractor from home depot, and use it to extract as much water as possible from the carpets (they'll be much lighter and easier to move once you get the water out). 5) After you've used the carpet extractor to get most of the water out of the carpet, remove all carpet and get it out of the house for drying (if you're trying to salvage the carpets), or throw the carpet out.

Does the basis remain in place since the seller would presumably hold the title until the payments are complete?

It sounds like something I could do here in our town of Dubuque, Iowa.

There is less to risk, they can be completed faster, and the rehab is easier.

It sounds like your best options are either a DSCR cash out refi, or a HELOAN.

Based on the link below, KY is an attorney only state. https://www.superiornotaryservices.com/blog/what-state-requires-an-attorney-to-complete-a-real-estate-closing-attorney-only-states/

sounds like a good deal. a couple things of note to hopefully help: SFR w/ ADU is fantastic, you don't want this to be a triplex on paper. do your DD here, and make sure those ADU's are properly permitted as such. if you intend to live in the property you will have to qualify w/ some type of ATR rules (income/ Ability to Repay).