What can I expect for timeline, potential issues, rough costs? 

Since you won't be able to recognize it as a valid rental if you're charging under market rent and you also expect to be covering any house expenses that are outside of her budget, this seems the best choice. 

By then I expect to have a clear plan so I can move into action.

There were a lot of costs that we didn't expect like the plumbing had to be completely redone.

ARV Potential: Where can we expect to achieve higher ARVs?

Better tenants expect better and treat the property so.

@Tannia CastroRecommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

Expect the first $1M to be easier then it slow down but assume a 10% marketing budget - meaning it will cost $100k for every $1M you raise early on after that first $1M

I think you'll be hard pressed to get an ARV of $140k IMO...I'd expect something around $115k or lower.

With the fires in CA, you can expect materials and contractors to become even more expensive.