As far as renting garages or extra space my insurance will not allow me to rent anything to a non-resident.

Or they want to do something “extra” not covered by the insurance, or they want draws on their work?  

I know here there are several extra requirements for a property to be used as an assisted living facility.

I would use the standard realtor lease form in your area and then look up common extra conditions landlords are using now.

She has been trying to BORROW the funds she needs $550K to pay off the Husband and another $300K of additional funds (Totaling $850K) so that she has the EXTRA borrowed funds to be able to make 2-3 years of payments on the financing (versus raiding her retirement account).

I'd like the home for a personal residence so I contacted this lady, apologized for her financial difficulties and told her I may be able to save her credit and take the home off her hands.

You would want to avoid a DSCR refinance right now for cash-out as those loan programs will carry prepayment penalties - refinancing post-rehab to get your equity back out of the property (based on improved value) would leave you paying an extra prepay penalty. 

So I don't know if it makes much sense to buy a rental property for about 200k-250k, just to make a few extra thousand a year (based on a 5% return).

I understand they have other clients and cant just drop everything to do what I'm asking but right now it feels like things are taking extra time by having a middle man. 

Demoed the whole house except one wall added 3 extra bedrooms 2 bathrooms customer fixers raised ceilings a pool and many more details.