No police report was filed and it didn’t happen on our property; and apparently this happened weeks ago although it’s the first time it was brought to our attention. 

I want to make sure I go prepared and give them whatever notice or if the police would do anything.

Hi I have approximately 8 years left to retirement I will be 44 years old when I can start pulling my pension from my law enforcement job. At my current pay rate I will gross $5,000 a month in retirement from  my pens...

Now she called the police because we had an argument in the front lawn about how she needs to pay the rent.

@Bryan BeyersIf it is for sure illegal for him to do that, make anonymous calls to the police for noise disturbance.

If you truly intend to live there, and get relocated for work to another state, the mortgage police are probably not going to come knocking on your door. 

Call the police dept and they can answer the question best. 

For those that ask how the kids can destroy a house, here are some ideas:They can kick when they are angry, holes in walls, doors, and cupboards.They can pull out drawers in the bath and kitchen and climb them, snapping the drawers.They can break bowl type sinks that sit on the counter.They can spill fingernail polish all over the carpet, tile and hardwood floors.They can pee all over everywhere if not potty trained and mom lets them run around half naked. 

@Ryan McGrath I think your first concern is to make sure it's a legal rooming house or to understand the steps that it will take to make it one - which I'll bet would include things like extra egresses and a sprinkler system.One incident / phone call / police visit where word gets back to the building inspector and you might find a big red "VIOLATION" sticker on your front door.Next, I'd want to do some forensic accounting. 

Interestingly enough, my first landlord when I moved to Omaha was a retired police officer.They Self ManageThis is the one area where I don't personally follow the standard 'Mom and Pop Investor' model.