I suggested using a regular Conventional Loan for an Investment Property with a 20% down payment and for the renovations, using a Construction Loan. 

I should ask for fee details though, haven't gotten that, thanks for the suggestion!  

In sum, your remove almost all the risks & costs associated with rehab,  your profit is often a good bit higher than wholesaling the same property and often not much lower than doing rehab & selling retail.

Can anyone suggest a way I can use the funds and avoid the tax?  

I sell at retail prices but my places are always a little cleaner, a little more updated than the competition in the same price range.

Looking for suggestions on how to eliminate pet odorsIn basements In subfloor

She is suggesting if you want to sell half the payments then a ballpark for that would be selling that for half the loan balance.  

Any thoughts or suggestions are appreciated.

@Tony Wood, I don't believe you can view the MLS without a realtor or a license, however I would suggest realtor.com as an alternate.

My suggestion would be to do a Land Contract instead...in reality, that's what you're trying to do anyway.As far as the understanding of the O.C.P. not credited towards the purchase, you're missing the most important point here.