So everything you’ve quoted it a little high to me but it might be normal for your market.

If the Flip involves renovation then the coverage is normally Builders Risk and Liability or a Vacant Dwelling with renovation.

If a key is so old (cheap) that it breaks in the lock with normal use, that's considered wear and tear.

Is that normal?  

Contract for deeds are normal in MN.2.

It normally has to be docketed on the court calendar with either a 30 day advance or 45 day advance depending on local rules.

Paying a normal conventional mortgage along with giving them profit is significantly lowering your margins for you to make enough on cash flow especially after considering initial repairs and cap ex.

As things are occurring now, the bank is being paid, so they have no interest in property seizure or foreclosure, as it is a performing note, so the FIL currently has the opportunity to conduct control of it in the same way a normal person would, which should allow him to pass this via normal methods (living trust for example) to heirs, provided the payments on the note have no interruption.Am I off on any of that?

The lender normally informs us of what needs to be fixed. 

My agent who’s also a REI has told me that 4.75% is too high and it should be in the high 3’s and low 4’s but from what I’m reading online and from what I’m being told by these loan officers 4.5-5% seems normal?