My initial thoughts when it was mentioned, was to push him more to a standard multifamily investing strategy.

Fortunately I have all the standard contingencies.I also question what is a fair price for insurance.  

Lowering your standards invites expensive evictions and repairs. 

MOST have ethical standards.

@Ben CallahanRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Would your existing tenants stomach that much of an increase?

It's kind of disconcerting when I can only raise rents by 5% but insurance is increasing by 10% to 15% per year. 

Once she receives a voucher, you’ll need to register as a Section 8 landlord and have the property inspected to meet HUD standards, which can take 30–60 days.If you want to move forward with rehab quickly, a cash-for-keys arrangement might be faster.

Deviations from the PLRs will significantly increase the risk to you since your transaction did not follow the PLRs exactly.Deviation from Private Letter Rulings There are a couple of areas where transactions deviate from the three (3) Private Letter Rulings discussed above.

However, a full or partial gift means you inherit their $33K cost basis, potentially increasing your capital gains taxes when you sell in the future.