So my thoughts are that 1) there is a lot of sentimental value in this home since she's been there for the past 36 years, and 2) she doesn't realize how much work needs to be done to the property to restore it and get it back to good condition.  

I do some classic car restoration, so for the time being, I'm going to use it as my restoration shop and storage facilities for my rehab tools and supplies. 

It all depends what kind of rehab you want to do, what kind of finish you want, what things you may want to restore or just replace, etc.

I love hardwood floors and would cry to see one not restored correctly.

Our agreement wording is:After additional deductions for cleaning and repairs necessary to restore the premises to its original condition (less allowance for reasonable wear and tear), along with deductions for any rent due (including rent loss during periods of restoration), late fee, caused inspection/eviction, utility, notice, legal and any breach of contract costs, the balance of the security fee shall be refunded pro rata as follows: 10% of the remaining balance for up to one month of occupancy; 20% for two months, 30% for 3 months, 40% for 4 months, 50% for 5 months, …and so forth until 100% for 10 months or more of occupancy.We also look for applicants who have demonstrated by past behavior that they are capable at staying at an address for some length of time; one year minimum, more is better.  

Another great spot to shop is Habitat for Humanity ReStores.

The rehab can cost more with less options on how to restore.

J can fill you in on the rest, or you can google it.After talking to these two guys, don't be surprised if you no longer want to invest in Phoenix.  

Should I pay off my entire mortgage and keep saving for a second investment property, should I pay down and refinance my mortgage and invest/save the rest, or can I start cash flowing enough to cover my living expenses without being a REI pro?

Or does it include sub work for restoring walls?