What sorts of questions can I ask her to learn how much risk this is? 

More people moving to a city is more potential tenants. 

Setting rent significantly above FMV could be seen as an attempt to shift income or inflate deductions, leading to potential penalties.

As far as home office no longer being an IRS "red flag" I guaranty that if you put a home office deduction on a personal return on Turbo Tax it will move their audit risk needle.

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.

Not only do you know the area better, but you’ve got easy access to the property for inspections, dealing with tenants, and handling any repairs or upgrades that come up.I know you’re looking into Indianapolis, Chattanooga, and Raleigh—all solid places with potential—but let me throw some local options your way. 

just to be blunt, that is expensive and high risk. 

So it's not really "extra coverage" for a landlord, but rather a setup that can potentially create problems and less coverage.

Does anyone have a document that breaks down a deal from start to finish, including potential tax incentives?  

What should I be aware of in terms of fees, timelines, and potential compliance issues?