My hope on this specific condex was that I could rent the first unit (questionable if it is "liveable" though it is owner occupied now - he's in preforeclosure) to cover the mortgage, while fixing the back unit.

But these rules are specific state to state and sometimes even county to county.  

I know it's area specific, but does $5K to re-do flooring for a 1,500 sq. ft. house seem reasonable? 

I've chosen one specific domain to play within (MF apts) and 2 main markets, but can't seem to bridge the gaps to close a sale.

Money is mainly what I am looking for, but more specifically enough passive income to be free from an 8-5 job.

Talk to a local attorney who knows the specifics on each step in your area.

I can't speak for construction specifically, but a lot of times in fixed price contracts you want the contractor to have the chance for extra profit.

The other financed properties reserves amount must be determined by applying a specific percentage to the aggregate of the outstanding unpaid principal balance (UPB) for mortgages and HELOCs on these other financed properties.

@Antoine Martel Do you have specifications in the JV agreement about handling the mortgage then?

I'd consult with your lender for the specifics of how the funds should be transferred from your family to you.