If you have a complicated structure with multiple people, an attorney would be better.

In that circumstance, special rules under IRC Sec. 732(c) will apply.For property received in a nontaxable distribution, a partner's holding period includes the partnership's holding period [IRC Secs. 735(b) and 1223(2)].This is a complicated issue. 

Like I said to start, this is far to messy and potentially complicated for a message board. 

(they don’t want it back and to move it themselves, they want you to sell it and come back for more business) Now considering the number of properties funded at any given moment and the ROI these HML’s are getting, it would be quite an extraordinary thing to go through this entire process and not having them work with you on this (because the amount of money stood to be lost in these proceedings eats back into the amount derived from things such as an extension on the loan and simply charging you points for doing so) Again, the ‘worse case scenario’ here I’m describing.Having said ALL of this and hopping over to PMI- this really depends on your PMI source- it could be easily assumed that for some people, working with the 'Frist Bank of Mom and Dad' as your PMI would be less complicated and seem less cumbersome (not in all cases and 'mom & dad; could be anyone) Odds are if they aren't related to you the ROI they expect could be much higher than a relative (on avg it seems maybe around 10%+, whereas a family member may ask for prime alone or something like .5%-1% above prime) My best advice would be to speak with possible PMIs you may already know as well as HMLs and simply become educated on what their requirements are- knowing what you qualify for, or alternatively don't (if you can take HMLs off the table right away knowing before you apply you don't qualify, it's going to save time in working your PMI angle faster) The single MOST important thing to keep in mind above all else is this; no matter who you work with PMI or HML- keeping lines of communication open is virial to not only the deal, but any future deals you will have with them (as they are financing) - IF anything looks like it's going to go wrong (say missing a payment) let them know so they can work with you and NEVER against you Hope this helps!

This is probably more complicated and costly than it may look.

The short answer is yes, you can still wholesale it as long as the City doesn't have it yet and even if the City does, you still have a couple of weeks but it's much more complicated. 

Cap rate works the same but the formula is a bit more complicated.

It is a little more complicated than that, but it may create a win-win situation where your mom's friend can move out of the house and into an apartment and you can acquire the house with little to no money down.

But with us investing half the up-front cost, and my in-laws living there, it complicates things again.

I understood, but since they're problem tenants I knew them waiting to get them out would only spell complications with the sale when it came time to close, and here we are.