A red flag is something that needs to be investigated to determine if there is mortgage fraud or not, it happens all the time. 

How I can determine if I am way overpaying for this property??

I recommend you do some research and learn your local laws so you're not misled by internet experts like myself. :) 

The rents used in determining self-sufficiency can actually include the unit you are going to occupy as well.

I'm trying to determine the best way to structure this real estate deal with my father-in-law(FIL). 

Unless you want to be part of a lawsuit to determine the legalities of this you may prefer to not get involved.  

The purpose for this post is to get in touch with local investors, expand my real estate investing knowledge, and determine my next steps to becoming an investor.

Rental income).Your income can either be considered FDAP(Fixed Determinable Annual Periodic) or ECI(Effectively connected income).You also want to understand how having a US LLC will be taxed by Canada.

That would help me determine who should get what.

Below is the process I followed when I first moved to Las Vegas.After some consideration, I determined that the most important tenant pool characteristic for making money is that the tenant stays in the property for many years.