I'm sure this is one of those basic/beginner type questions, but I figured the experts at BiggerPockets would be able to provide some good insight on this issue.

I guess my biggest issue now is making the first move.

I need some help on an issue.

Thats not going away, water issues or not.

I am sure there is a Houston equivalent that has an issue once a year that lists vacancy rates and other valuable info by property type and sub market.

They waived the appraisal contingency, so there is a good chance I'll have to fork over more cash out of pocket than I planned on the make up the difference between the price and what I get loaned.This is a hot area of town, and aside from these issues it is pretty much everything I was looking for in terms of size, location, and quality.

If this is the case, no I do not foresee any issues so long as you don't discriminate fair housing.

This accomplishes the same thing but relieves you of the related party issues.  

You can't afford this under any circumstances that do not include speculation on rental income and future appreciation of your departing residence.  

If you guys continue down that path, get everything in writing before you start, so that there isn't any "I thought we were going to do it this way..." issues that come up later.