Why can't you simply escrow the costs of the road repairs with the local government or provide them a letter of credit to accomplish this? 

Does anyone have any experience with this that can provide some insight on how to structure a deal? 

They were not able to provide references due to client confidentiality.  

He will be providing the capital to cover the closing costs and part of the rehab.

There shouldn't be any need to negotiate them as you would negotiate rent, they just are what they are, and the owner is required to provide proof of those costs to you.

Based off the numbers I provided above, how much could I get out?

Can someone provide me with some financing ideas other than the two that I just mentioned that would enable the other heir to receive cash from their portion of the equity based on its current assessed value and allow me to take ownership of the home, subsequently remodel it, and rent it?

Based on the new information provided by the City for what can Qualify; I would say this likely could Qualify for an Express Permit.

I have house hacked 3 times in the Logan Square & bucktown neighborhoods.It will probably easier if you can provide some more details on the analysis....maybe consider BiggerPockets calculator. 

And they don't provide much info on dividend distribution.