Most professionals will recommend a separate LLC for every $1 million in assets, but I don't think that's necessary.

I think they are a scam.

If she went to buy a house and applied for a mortgage, I think the lender would say the same thing aka you don't qualify until you get this removed from the credit report.

I would think they would know some developers in the areas (ones they like) that might be interested.

I think a community bank would be much more apt to put a deal together for you than a big national or regional bank like Huntington.

I personally think it really depends on how much value will it add to the property and if the town will allow it. 

I think it's worth trying.

I think @Patrick Roberts hit the nail on its head.

I think you should also confirm to them what lease renewal terms you are offering them so they can make an informed decision.If you make the repairs, you'll create some goodwill with the tenant and they will be more likely to renew.

But, I also think the access to information today: all the books, these forums, conferences, gurus on social media...