On a Standard 203k, you can add up to 6 months of mortgage payments (PITI) into the loan if the property will not be habitable during the rehab.

I'd also recommend The 4 Disciplines of Execution, The Power of Habit, and How to Win Friends and Influence People. 

It is vital that this type of escalation clause clearly spells out what is and is not classified as an operating cost. 4.

If you as a landlord thing you have the ability to change the lifestyle habits of your tenants, you've got a whole lot of hurt coming your way.

The floor area shall be calculated on the basis of the total area of all habitable rooms.

She needs to take responsibility for her financial situation and you may be doing more harm than good by incentivizing bad habits. 

So with his poor handling of the properties most have fallen in the habit of not paying for rent.

@Gary Pilkington wow did not know that, may have to check that out myself.Typically they just want proof of habitability, but that class may be the move for you just to be sure

Budgeting to building a "work network" to making a checklist on they type of property you are looking for.Reading has become part of my daily habit, and enjoy exchanging ideas with people who are in the same position as us as well as people that are 10 steps ahead of us.Good luck with your success!

Assuming of course that the finishing work was permitted and performed to code, and the new room's use conforms to habitability laws (for example, the bedrooms meet minimum dimension, ventilation, heating, and ingress/egress requirements).