These are the few numbers I have (purely based on first conversation) Her operating costs are about $900-$1000/month. about $450 for the county to come inspect once a month, costs of upkeep, meter reading, invoicing etc. 

I find that they actually offer more than some other programs at a fraction of the cost. 

If you refinance the property now the loan would be $100K at 20% down and $80K would have gone to repay the original loan.First, if these are your numbers for rehab cost and after repair value, it is probably not a good deal to begin with and you shouldn't be doing it.

(Sales price minus selling costs minus purchase price.) plus maybe 10% in state taxes. 

Tell them you intend to run a credit and background check, and tell them what it costs per adult applicant.

The rationale being you are reducing your personal housing costs as the rented unit will be covering some of the costs. 

A way to account for the additional borrowing (or in this case effectively a cash gift towards down payment) is to attribute an interest rate to the $500k (or even an interest free loan over 30 years).

But it's costly, currently I am in the process of setting up ReiReply Power Dialer.

Depending on the deal's profitability, some will only require you to bring 10% + closing costs to the closing table.

His cost basis at that time plus any extra amount he spent would be his new cost basis.