I looked at the place and believe that I can sublet it for $700, creating a  $40 cash flow with no money down (so technically infinite returns).

I'll spare you the technical details, but this is a situation you'd want to avoid. 

It will be interesting though because technically she is leaving a property that does have a FHa mortgage on it but shes not the borrower or title holder.Also, I've written about this in many other BP articles but please be aware about the SS or self sufficiency rule with FHA and buying a 3-4 unit property.

Scenario A (typical) - $500k duplex-$125k down-$375k mortgage at 4.6%Scenario B (modular financing) - $500k duplex-$125k down-$260k mortgage at 4.6%-$75k HELOC on primary residence-$40k loan against 401(k) (technically this would be $165k down, but you get the point)In scenario A, paying off the mortgage quickly makes zero improvement on cashflow until you pay it off completely, or refinance, and there's no point in that if your rate is locked in lower than current(or future) market rates.Scenario B could involve higher interest rates on the HELOC and the 401k loan, but you have multiple, simple, easy options for increasing your cashflow, and then you don't end up playing as much in the overpriced, volatile stock market.

I'd need an agreement with her prior to closing technically and a notice to vacate.The rent is currently under market by about $300 with minor updates.

In my area, Baltimore City, the courts are constantly kicking out cases that have some technical error.

Plumbing is mostly labor its not a technical skill if your not using copper.

Even if I am not in your market, I can work remotely, and would sincerely appreciate any advice as it relates to partnerships, analyzing markets, or the technicalities of using a LLC and of FHA 203(k) loans.THANKS!

I'm technically the third owner. 

You could just refinance it with get a regular mortgage, you wouldn't need a down payment because you technically paid "cash" for it (the bank won't really know you got a hard money lender to fund your deal).