What method would you use to tap the equity?

Thats why I am suggesting the safe proven method which it appears that you have a good handle on and congrats on your success.

Having the buddy live in it fills a need for onsite security for it, and to have someone who can help with the rehab without having to be an employee.  

multiple partners In one deal and the partners don't know each other is running up on a securities offering or deal you may want to tread lightly there.do what @Brie Schmidt  does compartmentalize them one investor one deal.. no pooling pooling of investors into one deal is a BAD idea unless you have a PPM structure and adhere to the securities rules.. you take on a ton of risk doing that. and way to much for just little vanilla rentals.

There are many creative methods for a experienced landlord to get rid of freeloaders like this but you need experience.

That's why we accountants have the most job security after nurses and drug dealers.

Is there any fast method that would allow the daughter to sell the house to avoid foreclosure?

Additionally, If anyone knows of other methods to get into investing without tons of cash on hand please feel free to comment and share your knowledge, information and experiences.

@Stephen Diaz I am in the same boat as you are currently and the way I solved my issue was I went through a hard money lender and then took out a secured personal loan to come up with the down payment.

Here is the ONLY way I would hold it...If you do not have any other good applicants that can take the unit sooner, I would take a non-refundable binder payment equal to one-month's rent NOW, then all of the move-in fees (first/last/security/pet fees) when you sign the lease for October 1st, which should be within a week.