A deed is given and accepted as an alternative to ("in lieu of") foreclosure.

Alternatively, should I focus on making minor upgrades to the rental property to increase the rent and continue holding it, considering the neighborhood’s growth potential?

Another alternative would be to buy the property yourself, keep the mortgage in your name but have your daughter on the title.

I'm California-based where there aren't any real deals in my area, so I'm exploring Detroit as an alternative real estate investment market - due to the combination of it being a strong market and my having connections in the area. 

Some hard money lenders specialize in fix-and-flip loans, while others might have a more robust understanding of the BRRRR method.Would you like help connecting with others who've used Rehab Financial Group or researching alternative hard money lenders?

I take a picture of their driver's license.I ask for phone numbers that accept texts and any alternate land or business phone numbers.I ask for the names and birth dates of anyone under 18, and ask if there are any service / emotional support animals, together with their names and breeds.I also ask for personal references, previous landlord contact info (and length of time there), employer contact info (and how long there, together with earnings), as well as the name and contact information for their manager / boss.

Here's a blog I wrote about H.S.A.s invested in alternative assets Financial Independence Retire Early - Achieve FIRE Faster with a Self-Directed HSA- https://udirectira.com/achieve-fire-faster-with-a-self-direc...

Is there a alternate way to structure it, please suggest.

Not sure if it was mentioned here already, but another creative alternative is to purchase a SFH that has a casita. 

Alternatively, investing in money markets is another consideration.