They specialize in asset protection, estate plans, etc. for seniors.

The problem is you have no Personal Asset Protection.

Sorry I'm not much help in answering your question, just not my area of expertise.

If there is no insurance protecting the mortgage holder (e.g., PMI) for the difference between what is owed on the property and what it was sold for, a court could enter a deficiency judgment against the property owner.

The downside is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC.

If we did decide to partner with her, I'm not sure how to work out the details of our partnership, the property would be in her name obviously and I'm thinking we could split the profits 50/50 because she's bringing money to the table and we're bringing our construction/property mgmt expertise to the table.

Because someone things the property is worth more than $86,373 (13773 + 72600) or they want to protect their interest in the property away from the county (aka the lien holder).

Now I have an umbrella insurance policy; if I have an LLC, can I just cancel the umbrella as I am more protected?

@Jd Martin has just given anyone that will listen/read a blueprint for success that is based on fundamentals that will protect them in the vast majority of cases and materials...good, bad..or ugly.  

Consider Turnkey, build wealth slowly, simply and using the bents and expertise of an existing space.