You would need to read the documents that was signed to "the woman" and ask more questions about the situation with "the sister"

Using pacer you can pull any document from the BK petition.

The bank may also want to see the property is stabilized, meaning you can document rent from and cash flow for the 2 units for a certain period of time. 

I'd like some suggestions on how myself and the 3rd investor can be included in this deal by contributing funds for down payment/rehabbing without forfeiting the owner occupant offer status and still be legally documented as part owners of the property.Thanks!

Assessed Value: $369,851 Percent Improvement: 81.09% Land Value: $69,930 Tax Amount: $4,119.46 Improvement Value: $299,921 Tax Account ID: Homeowner Exemption: H Tax Rate Area: 1-002 Tax Status: Current Tax Year: 2016   Foreclosure Record Recording Date: 01/30/2017 Document #: 2016-264310BK-PG -  Min.

Agent spoke to her broker and said we can sign a document saying she doesn't represent us and isn't liable for the buying party.

Second question is; what kind of documentation should be done in this situation? 

Raj,The biggest thing about setting up an LLC in any state outside of your home state is the Registered Agent, this is where ALL legal documents will go if there are any (e.g., being sued) that have to be delivered to a person. 

That would be in your loan documents.  

Pending your administrator or custodian, they have certain requirements and language they expect to see within Mortgage documents you will need to clarify that before moving forward with any lender.