Thank youJonCurtis  I would think, based upon the info you gave, but a fixer upper which you could rent out or sell at a profit

To calculate the offer we are missing one more number and that is our profit: what do we want to get paid for the time and effort it will take us yo get the property from the current condition to the proforma we projected. 

If you intend to do a reno, then an appraisal won't matter much since your end profit will be reliant upon your finished product.

Any sort of manipulation other than a 1031 exchange is going to result in a tax consequence although an installment sale or sale of membership interest of an LLC can spread out some of that.However, I think there's one compelling reason to explore the LLC route anyway if the buyer has good financing capability if they do not want to pursue a 1031. 

Offer them a 5-10% profit sharing as tie breaker.

I would like to get your opinion on how to structure our specific scenario: we plan to purchase property with cash (using private $), my fiancé will live in it during the flip (~ 8 mos), then we would like to keep the property as a rental, but pull as much cash out as possible to pay her Dad back including his profit.

I recognize there is tremendous risk in pursuing a development and lots of possible pitfalls, but we hit the jackpot with the location and to us represents once in a lifetime opportunity to remain owners in a prime parcel of urban city property that every person I have consulted with in real estate has agreed should be held on forever given its appreciation potential. 

I’d eat up all my profit in rent in a mortgage but I’ll be able to add some great value and hopefully get a 18 unit or larger building with the leverage. 

I've bought a couple deals from wholesalers, and it works out, but when I see the assignment fee that I'm paying, it just makes sense that I should go out and find my own deals--I'll have way more equity and my portfolio will be way healthier in terms of profitability and equity.There's a lot that goes into finding one's own deals--marketing for the leads, following up with the leads, getting them under contract. 

A 1K profit?