These documents are harder to manipulate than a P&L or QuickBooks summary.

If you are working with an investor-friendly CPA, I would ask what you need to document to make it easy to write off the expenses.

There were some challenges along the way with the lending process but I was able to provide all of the documentation required and close on time.

Having a dedicated account for property-related income and expenses makes it easier to track and document everything for tax filings, deductions, and accounting.

(We're aware of the five year look back period for Medicaid eligibilty but it's not a big factor in our decision to do this.)We would get the house appraised so we can document paying FMV.House would be purchased with cash (it's a small home in a rural area and value is low)Inlaws would sign a lease so that it becomes a legitimate rental and we can deduct expenses, etc.

Is it even possible to do or would they have to sign a whole new document?

When we reached out we were told that the deeds had not been transferred and we owed them some notarized documents.

However, I do know septic inspections and repairs are more documented and regulated. 

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

Contracts, financials, and supporting documents are the backbone of the process, and missing even one can lead to delays or worse.Third-party inspections—like surveys, appraisals, and engineering reports are also key.