We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses. 

My only concern that I have with hiring a second contractor is that (normally) a contractor is always looking for work / source of income.

It depends on the condition of the house... we buy cash only, so it's houses that won't pass inspection, and normally offer 30-40% off MLS, and they work with us.. although we have gotten a subtle FU before.    

Normally, I have a contract and just assign my interest for a fee.  

Normally when i buy properties i pay the title company for title insurance, title check etc... but in this case it is a bit different.

If there are none, then there shouldn't be a big concern other then the normal small increases a person normally sees. 

The life insurance death benefit is normally received tax-free by the beneficiary.

Trustees get paid in part by money they bring into the estate to pay creditors with, so if has no money to bring in to pay bills they wouldn't normally mess with it.

Just give your private lender a note and 1st deed of trust like a normal bank would get.Your or any quality title co can help with this and refer you to an attorney in their network that does them all the time.

Jaime this is normal, a little cold feet before making a decision like this is to be expected. as long as you are sure of your numbers and they make sense you should be fine. from your math you will be spending $19 a sqft for the rehab?