However, I am out of my element when it comes to leasing a commercial property.

Dan made some great points, but the family element certainly makes this a unique situation.Depending on how the numbers look, there are a few ways for you to potentially structure the deal.Feel free to shoot me a PM if you’d like to chat about what’s best in this situation.Best of luck!

I try to look at each element - throw out the stupid things/things I can't change, improve what things I can change, and move on.  

There's numerous issues; hole in floor and hole in wall, outdated kitchen, ceiling tile is coming off in portions, metal roof that screws need to be replaced etc...

I know there are numerous groups that would oppose such a move (even in Texas) so I'm looking for anyone that may have experience with this strategy and can offer advice on the hurdles I would be faced with.

Her edge for me to consider her over others is that she can offer higher and stable rent, but I need to verify if her higher rent is including utilities ASAP; she asked me to increase my asking rent to what she’s allowed from section 8 if I can provide her a cooking stove, and to install central air which I’m considering anyway.And what should I tell my other turned down qualifying applicant without any discriminating element that I might not be aware of if they ask for the specific reason after I’d told them that I’d already chosen a financially better qualifying tenant over them?

You will paint numerous times.

When I am out of my element, I turn to professionals that specialize in that field.

I see it all the time and have bought numerous properties from failed landlords that have made this mistake.Good Luck,Mike

Marko Rubel, for example, says numerous times during his boot camp, "This is America, folks, land of opportunity!"