I could point out the differences in fair housing laws between house hacking and non OO renting.

Owner occupied can generally be more selective on who they rent to, without violating fair housing.

Best guess if we were a plane flight away and not a fairly short drive, there would be less demand from groups of 15-25 or so people. 

I think this could have a fairly large impact as people have gotten used to 4-5 percent interest.

The lender tracks this information because they want to ensure that their underlying security is insured and they will be informed when you change the named insured.

Plus, how is a tenant going to view the fairness of paying half the water bill, when there's no way to prove they used half of the water. 

Do you feel that maybe you could have done more to ensure you mitigated your risk as much as possible?

You have to be careful as a landlord to be in compliance with all current fair housing practices.

They both insist that there are creative ways to structure this deal so that me and my mother can LEGALLY , and secured by CONRACT, be able to collect the net proceeds, and split it 50/50 as her and I agreed from the start.One of the proposed arrangements I researched and sought legal consul for, and am fairly certain would in fact still be an act of fraud.A broker brought in an investor who proposed the idea of purchasing the Mortgage Note, and giving us the difference, secured of course in advance by a contract where we would agree to forfeit the Security(house) once the note was purchased. 

@Rasheen Johnson Having an attorney opinion based on your state law is always the best choice to ensure everything is kosher.