Now you need to figure out how to find deals and pay for them.

Its hard enough to find the "right" house to live in, but when you add factors like: foundation repair, new roof, new hvac, complete cosmetic over haul, it makes it that much more difficult.Certainly can be done, and not only that, you can find a house in Collin county off market cheaper that what you would pay retail.Its important to make sure you have a resource for properties, an investor friendly lender Ie.

Her sister has agreed to us paying out her portion of the equity and having us use this as a rental. 

Matthew,Yes, you would want to use those funds and do a 1031 exchange to avoid paying taxes on the cash or (boot) from the sale of the home. 

Your monthly mortgage will be about 2,000, which won't pay the bills as a long term rental.

And now that the furniture is not an expense (since I’ve already purchased it) I literally just need to plop it somewhere vs pay for storage!

My realtor is also exploring options with their legal team, but extra insight is always appreciated. 

You typically have to pay per 30 days but I've seen that it's worth it as an extra protection for us landlords. 

My understanding is that it is me paying out of pocket what the previous owner has put into the house.

If our agent pays him via checks and bills us at closing, does this have any +ve or -ve impact on the taxes?