It depends on what you are looking for, if you don't want an agent to do any analysis or deep digging to find properties, your friends are probably capable of handling all the paperwork in a transaction just fine. 

(c) A water supply approved under applicable law, which is:(1) Under the control of the tenant or landlord and is capable of producing hot and cold running water;(2) Furnished to appropriate fixtures; and(3) Connected to a sewage disposal system approved under applicable law and maintained in good working order to the extent that the system can be controlled by the landlord.

Making the strategy moot get umbrella insurance, run a tight ship.

Some houses are ok and able to right the ship so you may be one of the lucky ones.

Operating income minus expenses (net operating income) is what that property is capable of producing for an investor. 

Stick within your capabilities, and don’t hesitate to call a pro when you need it.

I view them as a business that I want to keep in business, I would not get their rental rate from a normal tenant but I don’t really want to share the volatility of the pricing until I can evaluate how capable of a host they are.

Can she not rent out the home and "pay" your friend a large "manager fee but is saving some or all of it so Medicaid will not see and he quietly pays her back all or some of those "management fees" after Medicaide people check her capability to get help from them?

Dreamers dream, they are not capable of taking action.

Back in those days I had to prepare by ordering a bunch of old fashioned things called "books" and have them shipped over to Hong Kong.