For unit #2, let them know that due to inflation/taxes/etc., rent is going up to match market rate for the area.  

Unfortunately, these are known to not work well and can be a safety/fire hazard - even though they remain UL listed.

If you're filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you will need to meet the new filing deadline of January 31.If you don't have amounts in Box 7,then the deadline remains February 28 for paper filings or March 31 for electronic filings.

If you do, just make sure you have all paperwork for current leases, sec deposits, from tenants for past 2 years. more than likely you won't have the verification from tenant that says they agree to what's been paid, a Estopple but honestly come hell or high water if you want that building your going to take the opportunity now that gets you the property and deal with any tenant changes that may come up if they remain.

I'm okay with a piggyback loan to support the remaining down payment (80-15-5).7.

Currently my father n law owns the building and has $125,000 worth of debt remaining on his loan.

There are a few more mobile homes left on the street, so as each one sells the remaining ones seem to appreciate incrementally.  

How would you calculate what the balloon payment would be after 4 years.... is it solely what is remaining of principal from the amortization schedule? 

This property has been rented out to a great rent to own tenant so I'm sure they will take care of the remaining issues if there are any.    

IIRC, if you take out a personal TSP loan and you don't pay it all back by the end of the tax year, you have to pax income tax on the remaining balance.