I don't know if any of this would make sense or cash flow since we don't know any specifics about market value, established rents, etc.

Would it make sense for me to approach him about doing a Warranty or Quit Claim deed to get him out of the mortgage and I take over the payments and ownership of the home and prevent him from foreclosure?

@Antoine Martel - That makes perfect sense...I setup searches for Buyers all the time- so I will definitely do this.  

Economy is strong, resilient and the sense of community for such a large city is second to none.

How would I know if an equity stake made more sense... something like a 60/40 split?

I know I look at things weird but I'm trying to make it all make sense and get a good deal.

I think what you suggested makes sense.

(Shameless plug: my wife @Erin Spradlin actually just wrote a BP blog post about the need for STR insurance.)I am not an insurance agent -- insert obligatory disclaimer here -- but I can almost guarantee you that your normal homeowner's policy will not cover you, which makes sense.

I've contacted insurance companies about buying flood but the numbers just don't make sense for rental property.  

Perhaps it makes sense to get the best of both worlds:  Pull a HELOC instead of a cash out refinance.