Options beg the question "on what terms", which is why many fill out an earnest money contract to define the terms. 

I'm just getting started out in this area and would appreciate any suggestions or advice.

I’ll want to rent it out to other people and possibly add an ADU and do other renovations is this risky with the deed still in her name? 

Not sure if you were looking for a long-term hold on a two family, but it seems that was not playing out favorably for you. 

Purchase price: $210,000 Cash invested: $6,300 Townhome that I bought to live in for the first year with 3% down, then rented it out after the first year.

It sounds like your house hack was a success after securing the FHA loan and renting out the second unit. 

Quote from @Corey Gelineau: The inspection contingency is used to legally back out of a contract due to the property being in an unacceptable condition upon inspecting the property.

If you are a new out-of-state investor or thinking about investing out-of-state, you need to see some parts of the house before making an offer.

Quote from @Golan Corshidi: Hey all,I used all the advice and wisdom from these channels and decided to do my first deal out of state.

My guess is these guys have no idea what they are doing, will dig about 30 feet and then drop off the face of the earth when they figure out they vastly underpriced the job, and especially will do so when you tell them you were thinking $250 was closer to the value 🤣