She has a co-signer willing to sign, but I'm hesitant with her age/safety (the garden unit has a steep staircase) and with rent being $1800 is that doable for her?

So having safeguards in your loan docs or safeguards/plans outside of loan docs is essential so both parties know what the plan is if and when such occurrences take place.

Building your "Core Four" is going to be essential.

So essentially, you can't move out and then rent a house by the room.

However, the remaining gain not covered by the Section 121 exclusion is taxed at your ordinary income tax rate.Here's how the calculation typically works:Calculate the Depreciation Recapture: The $9,000 of depreciation would be recaptured at a maximum rate of 25%, which is $2,250 (25% of $9,000).Calculate the Remaining Gain: Subtract the excluded amount (Section 121 exclusion) from the total gain: $100,000 (Total Gain) - $9,000 (Depreciation Recapture) - $250,000 (Section 121 Exclusion) = $0Tax the Remaining Gain at Ordinary Income Rate: Since the remaining gain is $0, there would be no additional tax on the gain.So, based on this calculation, it seems like there should not be any additional tax owed after taking into account the Section 121 exclusion and the depreciation recapture at a maximum rate of 25%.It's essential to review your calculations and ensure that you are accurately applying the exclusion and depreciation recapture.

Often when I work with real estate investors to create asset protection strategies, most tend to prefer a simple asset protection structure (something low-cost that does the job essentially).

Its essentially the same as a reverse mortgage.

We plan to use the home for short-term rentals—so safety is important.  

Financially this deal makes sense; however, I am concerned with the safety aspect… I must live there for a year since I am looking for an FHA loan.There are areas close by that i know can have criminal activity but I am uncertain about this specific area (1-2 mile radius).

My thoughts on the HELOC are that we could use it to renovate our current properties and use the funds to fix up distressed properties in the future(doing BRRR-like activities) and thinking it could be used as a safety net if needed.Should we be doing this HELOC if we are unable to pay it back in full at a later date.