You would need to compare ARV, with market rents, and the rent she can afford. you will have to purchase cheap enough that you still generate adequate cash flow from it. if you are asking about letting her live for free...well that's just donating to charity.

Good insurance coverage is adequate protection on a rental.

But do talk with a good insurance agent and make sure that you are adequately covered.  

Those turn key owners if they do not have adequate reserves will lose the properties with defaults and get mopped up on the next down cycle by heavy cash reserve investors buying at a discount.Focus less on the price to purchase and more on the quality of the location and property long term especially if you already have cash today but limited time to deal with headaches.Example a doctor buying a C or D area turnkey just because it is cheap for 100 a month cash flow when they make 300k or more a year and be inundated with problems and requests from lower income tenants just does not make sense to do.

Can't really give adequate advice without knowing your goals. 

I would caution you to not buy a property until you have adequate reserved to take care of the repairs that will be needed and the shortfall when the tenant decides not to pay or vacated the unit.Good luck

Sometimes even for reasons beyond the non warrantable issue... ie I had one not go to closing due to the HOA not maintaining adequate insurance on the building... and they certainly had no incentive to raise the coverage (and thus cost themselves money) just to help one investor buy... so we had go to yet another lender who finally was able to help us out (credit union).  

You will just get stuck in the queue down at the city, and have to wait like the rest of us...2) As long as you don't make any major changes to the floor plan you shouldn't need to worry about the current configuration of the building relative to the zoning code, as the existing building will have been grandfathered into that code when the city rezoned that lot U-RH-3 from its original SFR zoning.3) The best way to reduce your risk is to do adequate planning up front.

- Once house is appraised, hopefully for an amount that will let me get a home equity line of credit, use said HELOC to finish my basement and rent out ASAP- if i'm not able to get a HELOC for enough $$ then i need to rethink my strategy- also, finishing my basement i think will be a ~50K job since there is at least 1-2 feet to be dug out before any work can be done to put in a bath/kitchenCouple things need to go right for this idea to cash flow adequately but i won't know until i try....the big goal or the immediate goal after that is to potentially buy a triplex that i'd occupy and continue to rent out my initial SFR with that other tenant in the basement.

Just make sure you have adequate parking and a good lease.