This is a rough game to play you just need to know rules and play them 

I think mostly due to unrealistic sellers holding onto the home values of a couple years ago.

No offense but you are asking rookie questions ready to enter the championship game. 

Option 1: I was thinking she gets her $650k, she holds the note on a 40 or 50 yr amort loan.

Once you identify a property you'd like to hold onto, you can initially finance it through a bridge loan and later refinance.

You can also hold the security deposit for those repairs (if you've stated those terms in your lease agreement).The short of the long here is that they're in violation of the lease and you are able to take action.

I'll split this post into two parts based on your question...NUMBER 1: OBTAINING POSITIVE CASH FLOWIt comes down to many factors, but a few key factors that I have found that have the largest impact on the property's cash flow are below (The below generally holds true for any market.

House hacking isn't just a strategy; it's a financial game-changer. 

Investment Info:Single-family residence buy & hold investment.

And the GC has no money at stake, so he can simply walk away if things go badly, leaving you holding the bag.