And the Real Estate Commission would have to investigate any written complaint.

Speak to a real estate attorney as I cannot really give legal advice on this, but I have seen clients of mine structure this as a leaseback. 

Which is not necessary and a little tricky legally, but she certainly has enough money to pay their rent so that is not my concern. 

But non-arm length transactions are certainly legal and what you're describing sounds doable. 

She claims she is unable to get a bank account due to "legal reasons" and needs to use her friend's bank account and said her friend doesn't even have a phone number. 

In my state you have to be 19+ years of age or older to enter into a legally binding contract.

But use BRRRR and legal entities in such a way that you don't want to wait for the seasoning period, and you can BRRRR every month.

There is a right way and a wrong way to do a LLC, 99% follow the herd on biggerpockets and think they are "protected" by doing this but all it seems like they are doing is throwing money away by making life harder for themJust my non legal 2 cents on this. 

Here are the Fannie Mae guidelines for legally non-conforming properties:If the Property's characteristics are legally non-conforming, you must:ensure the Borrower executes the Modifications to Multifamily Loan and Security Agreement (Legal Non-Conforming Status) (Form 6275);confirm whether, if fully or partially destroyed, the Property's Improvements can be fully rebuilt to the pre-casualty condition per current laws, zoning requirements, and building codes; and if the Property’s Improvements cannot be fully rebuilt to the pre-casualty condition, evaluate if the as-rebuilt Property will support the Mortgage Loan at the current Tier, and document your analysis in the Transaction Approval Memo.To assess the Borrower's ability to rebuild Improvements on a non-conforming Property to a level that will support the Mortgage Loan at the current Tier, you should consider: conducting a threshold analysis to determine the resulting actual amortizing DSCR if the reconstructed Improvements cannot be rebuilt as-is per current law; the likelihood of a casualty event (e.g., wind, earthquake, fire, flood, mine subsidence, etc.); the percentage of damage to the Improvements at which the Property’s jurisdiction will require the Property be rebuilt to current zoning and land use requirements (i.e., the destruction threshold); which Property characteristics the destruction threshold percentage applies to, such as market value, assessed value, replacement cost, or unit count; for Properties with multiple buildings, if the destruction threshold percentage applies to each building, or all buildings as a whole; the replacement cost to rebuild per current requirements for zoning, and land use; the Property’s continued marketability, and economic viability; the amount and type of Borrower-maintained insurance coverage required per Part II, Chapter 5: Property and Liability Insurance, Section 501.02C: Ordinance or Law Insurance; insurance loss proceeds payout, compared to increased rebuilding costs, including from building code changes, Americans with Disabilities Act compliance, and the municipality's local zoning requirements (e.g., green compliance for new buildings, etc.); the sufficiency of estimated insurance proceeds from ordinance or law insurance and other coverages to repay the Mortgage Loan in the event of partial or full casualty, or condemnation; and for a Tier 3 or Tier 4 Mortgage Loan, if requiring execution of the Limited Payment Guaranty (Form 6020.LPG) would mitigate the risk of the as-rebuilt Property not supporting a Tier 2 Mortgage Loan.

Just make sure to talk to your accountant and legal team to verify that this approach is in the best interest of your particular situation.