In Pennsylvania, assigning contracts can trigger realty transfer taxes.

Shouldn’t be too bad.However, converting the Duplex to a four plex is a much bigger deal, I would seek out some more specific advice to your location before pulling the trigger.

I want and will be in compliance to the fullest extent of the law, but to be truthfully honest, I dont want to go any further for this particular renter than what I am legally supposed to do and I want to be ready if the late night plumbing call comes and I am on vacation.

Your offer to partner on a four unit interests me but I am probably not ready to pull a trigger on that now. 

Takes a lot of work and you have to be able to pull the trigger fast, like less than 24hours.Personally, I would not buy right now in the San Jose market based upon appreciation alone. 

-More sophisticated the investors the less documentation and compliance we need.

She isn't sure about it now but if you pull the trigger and have to spent time out of town working on it I can't see it winning her over for the next one... 

When you have it sighted pull the trigger .

That in itself does not trigger the HA to terminate the tenant’s contract.  

Please don't tell you think you're going to force the issue through legal action.Your friend is in a illegally rented unit and you want to force compliance with a lease LOL.