Or would we be better with the 80k mortgage and doing a separate renovation loan?

Should capex and expenses be kept in separate accounts  form your personal cashflow?

I have a Mother/Daughter home in Middlesex, NJ that has a separate, private entrance for the second floor apartment.

I consider this two separate topics: 1) what does the property need to make it rent ready?

They are completely separate buildings (500 ft. apart) but share water connections, entrance easements and such.

I think it is best to separate the two issues. 

It's "Notice of lis pendens" and it basically means that there's been a lawsuit filed against the property usually when there's title dispute.As an investor, don't get emotionally attached to properties because it will end up costing you more money when you can't just walk away.

Further the idea of "saving" (cap ex) money for a roof, seems silly unless you are actually going to put the money in a separate account.  

In regards to renting by the room (house hacking a sfh), this strategy would typically bring more rent than just renting out the entire house to an individual.For example, median rent for a 4bd/2ba house might be $1850 but if you rent it by the room (individual lease for each tenant, each tenant pays you separately) you might be able to get $500/room or $2000 for the entire house.  

I realize he is your brother, but make sure you are not letting emotions get in the way of logic.