She will receive the initial "buy" amount that we agreed on, a portion of which is going to be paid up-front in order to bring her mortgage current and give her enough to move out to Ohio, and then a percentage of the final sale amount.The reason this flip works is because we are avoiding going through two purchases and also avoiding financing fees from a HML on the purchase of the house, since the owner will still own the house during renovations.Since she doesn't own the house outright, this isn't really "seller financing," but maybe more like a joint venture?

You'll never be able to get enough rent ($12-13k/month) to cash flow.If you pay $1MM for a $1.3MM property from your parents the IRS will likely see the difference as a "gift" and you could owe taxes on all or a portion.

In a way, I am just trying to prevent myself from forgetting something small that is vital for my guest. 

Our monthly portion of rent covers the mortage but cash flow is essentially zero (we profit maybe 100 bucks a month).I have always viewed this as a free ticket to eventually owning the house, we will pay off the mortage in 7 years and then the rent would be "free money".

It is vital for me to investigate and finally make a decision.

Depending on how bad is the foundation state (how many inches you have to correct), is very possible the sewer line will disconnect/break in the horizontal portions.

Buuuuut, on page 3, which is where the company-authored portion begins, it states: "This contract creates a mortgage or lien against your (Owner's) property to secure payment and may cause a loss of your property if you fail to pay the amount agreed upon."

From a strictly cash flow perspective, not ROI, Cash on cash, etc where you would benefit from the leverage, paying an expense such as mortgage interest only puts a portion of that back in your pocket on taxes. 

Fairly new to this and although I understand how to run most of the critical calculations to analyze the deal the part I am struggling with is understanding the best methodology when it comes to the "Refinance" portion of the deal.There are (2) extremes:Option 1: Take the full LTV that is offered even if it means running cash neutral/negative as it is buying the next house and the combined income of the (2) houses versus one is more than just the one.

What are some options for their ability to request repayment of their contribution plus their portion of the appreciation?