However, she is going through a major life crisis and is going through abuse from her kids father.

she also mentioned that she has called the police before when outbursts and abuse has occurred, but it takes 8 hours for them to come, and they have openly told her there is nothing they can do based on their same sex relationship. 

This is the simplest method, but it also means your tenants are more likely to abuse the utilities by leaving windows open with the heat or A/C running, leaving lights on, ignoring the toilet that constantly flushes on its own, etc.3.

What happens if the relationship goes south, he gets hit by a bus, he does a bad job on the rehab, he runs out of money, etc., and you want/need to hire a new contractor? 

I do not invest in properties that tenants are not 100% responsible for all utilities due to the higher risks of abuse of utilities by bad tenants.

If it was a sexual incident, murder, or certain violent crimes then I'm probably never renting to you. 

The vegan could stab you to death with a carrot slicer, or the gun owner could shoot you with a gun, or the [obscene sexual reference here that leads to death], and you're just as dead in any of these three cases.

One was a holdover who refused to vacate after an acquisition and was thrown out by the sheriff the other stopped paying and sat in the house until eviction day and then left peacefully before the sheriff showed up.But of course it is going to take  ages to get a date for an eviction case,  the system is clogged up with filings from landlords against tenants who are "5" days or whatever late and who are in effect abusing the eviction process to get their tenant to pay. 

I guess my point is, while there is a proper way to calculate the number, Cap Rate is sometimes abused and done improperly.

I've know many people to abuse this, even print fake docs from online to get their pets special privileges.You could also waive the fee, but then negotiate another area to compensate.