The issues come later:When a deal goes south, when an investor has their attorney get involved or when other things might happen where third parties get involved (estate matters, legal matters) that's when the origination of their loans surface and that's where folks get nailed.What you may have meant by "soft" might be where eyes are turned away from some matter by a regulator, like a cop not giving a speeding ticket, at one time, there were various issues where I'd let something "slide" as there are considerations to enforcement, won't go into all that, but it doesn't mean it can't be serious.Those matters that later go before a judge where a violation is not brought against someone doesn't mean that judge isn't aware and takes that into consideration.

Since we normally rehab for rental, when feasible, we will pave the drive (even overcoat/chip seal) as it makes a better surface for snow removal, etc.

Sure, she could quit both jobs and go into hiding, but sooner or later she might surface, and the judgment will be following her. 

Upgrading to hard surface isn't worth the cost difference to me.

Also surface is uneven so would think that could get tricky.Putting down a concrete texture from a hopper gun.  

I've been reading about live-in flips, we've just never considered that an option because it seemed very complex on the surface.

It can even grow on moist metal surfaces with air passing over it. 

Purchase price: $32,000 Cash invested: $34,000 Sale price: $85,000 First time flip; After additional rehab costs surfaced, decided to sell rather than hold as a rental to optimize profits; Reinvested those profits back into the business.

The backyard has some broken cement surface (about half) and some dirt.

You are talking about wall tiles here - I would have to see a picture, but I can't figure out in my head how you would have trimmed that out without it looking like crap or how it would meet surfaces properly, i.e. sink, etc.