By necessary I mean medical bills, adoption fees, not a new couch because yours was old.

So is food,, education, medical, dental etc. basically core services. 

There are no 100% loans for this type of deal unless you are a doctor, dentist, veterinarian with an established practice.

We are looking for a little passive income in a semi liquid investment in case a medical emergency comes about.

Workers comp covers work related injuries, doctor bills, lost wages, etc.

She needs at the least these basic documents:1) Will2) Power of Attorney3) A durable power of attorney for health care4) Advance medical directives5) Do not resuscitate order. 

At this early stage, you don't yet know if your neighbors would even benefit from financing the sale themselves.It'd be like your doctor telling you "I'm really eager to prescribe you some Zoloft," even before they've had an opportunity to examine you and understand your situation.So, don't ask the family about owner financing.

I'd probably do independent living, and if someone needs medical assistance they can have home health aids come by.  

Go to an affordable college and take a subject you can actually get a job in (high tech, medical field, business) or don't go at all.

If its a business you can give him notice that he can not have a business operating in your residential house.You also might ask him about his own medical insurance or ask him to get medical and liability insurance to protect himself.