I'm coming up empty when looking for anything of the sort in the state of NJ.

Leave the tough ones like the hair crack in the ceiling.  

I am hoping to create some sort of fund for friends and family to invest in so I can start scaling.

I would have some sort of business plan together, that way you have answers ready before the attorney asks the questions. 

So far in my real estate investing career I had the good fortune of not having to take on debt so refinancing sort of intimidates me.

What I've done for people is use the public records to look up the tax records for every home in a particular zip code, then filter those down to the homes that are more than 1.5 years delinquent, then pull home details on those homes and sort down to only the type of home the investor was looking for.  

She is a broker (not an investor) and just wants her daughter to have some sort of obligation to come home.

How do you sort this type of issue when buying this type of properties ?

To make decisions that would affect a series of events that would cause you to create some sort of asset whether it be a check cut from an escrow account or a fresh piece of real estate that is cash flowing quite well is just hard for some people to fathom.If you have self-doubt about your own abilities to succeed in this business of real estate investing then go and listen to the podcasts as I am doing currently.

You might also check with the inspector as he would have heard if this sort of thing happens around there.I do suspect however if the disclosures were misleading, you have a legal case to get your money back.