The smallest I can make this property to allow a feasible layout is 4,000 sq ft.

And part of the reason there is that the one thing I have always heard from experienced investors is their one regret was they wish they had never sold a single house.Well, eventually, I will sell some of these houses in the areas further away from me and/or the houses with the lesser layouts, etc, so I can upgrade the portfolio.

Use that time to get all the info you can about the spicket, local/recent rules, meters, talked to a contractor or two for opinions, get the layout of property lines and what lies underneath who's property. 

I had written up a little proposal about why lending to me would be beneficial to her and her husband (she is my landlord and the real estate business is kind of her thing), why lending to me is safe, as well as lay out a couple lending strategies.

I stay away from tile with larger bevels on the edges, and either walk in with a square, or lay out the tile in the floor with edges butted to check for square.

If you do your homework and you do it well, and you come up with a value that's only $560,000 and he's asking 1.5 million, there's something odd going on.You may even want to lay out some of that math to show that you're not just trying to lowball him.Many people have unrealistic expectations of the value of their property, especially if they've been living in it for a long time or have put any of their own time and energy into improving the place.

I would like to lay out a scenerio for a property that I am closing on in the next few weeks (hopefully, we have a final approval for SS) and hear what other buy and hold investors have to say.Backstory- My normal bread and butter property in this area is badly distressed, total rehab (all mechanicals and cosmetics).

Who can I go to for advice on the layout?

Just state that "...my proposal is for X total price, paid to you as follows:" Then, lay out how you will pay them.

Your layout may be different.