There SOW would usually be - 'I want a remodel done on the kitchen and bath, and add a new bedroom on the left side of the house'...Then I would add items that only a GC would know about or notice, like needing new headers for the openings they want, the elec panel being undersized, or the roof being suspect, etc...Together we would then arrive at a comprehensive SOW.Yes, that is much better scenario.

Does each room have its own private bathroom or is there a shared hall bathroom? 

I would look at private money lenders who can consider giving your a line of credit based on a multiple of the cash you have. 

If the R2O buyer gives notice on their current place and your deal falls through at the last minute, those tenants would be scrambling to look for a place to live.

Probably depends on the location and part of town if neighbors care or notice. 

I know people who do STR in their house, but it's as private as possible.

You will likely need to pull out and cap the bathroom plumbing if the bathroom was not approved and remove the stove since the city is already on notice of it.

I do all long term but its something I have noticed when doing research on setting rent prices.

I've noticed that building strong relationships with both buyers and motivated sellers has been a big benefit.

So, unless there's a special housing law in CA, you have the right to not renew her lease (assuming you provide enough notice per the lease) whenever you want.