.- Total start up costs (Down payment + closing costs, furnishing, getting started on Airbnb etc...) = 200k USD- Family member wants to put in 50k USD of the start up costs, but doesn't want to be on the hook for the mortgage. 

I’d make sure your business plan lines up with these rules to avoid any problems.

You can let them know well in advance rent would go up to $X or simply ask to have the unit vacant at closing as it will be close to the end of their lease.

Except for contracts that specify that and violations of specific laws that allow for that for the most part people end up paying their own legal fees.

The tenant in the apartment above the storefront is staying and the current tenant in the storefront's lease is up.

I am a fellow investor here in Atlanta I have STR /MTR/LTR feel free to hit me up will be happy to point you in the right direction. 

Our drywall subcontractor also sealed up a few vents which caused some rework.

I had a similar experience and just put up a post about it.    

And after rehab value will be at least $280k, and up, depending on options/features I plan to add (i.e., off-street parking, on-site laundry, garage, etc).The ultimate plan is to BRRRR, and I'm able to secure verbal agreement from a couple of relatives and friends for financing.

That's going to be up to your current servicer but my gut says, they won't drop the PMI until the reno is done.