First thing you want to do is get very familiar with their existing agreement (is it month to month, who paid a security deposit, who pays the utilities, etc.).

Keep in mind this is entirely DIFFERENT than a contractor being paid through the loan you secured on the property if you got a renovation loan.There are plenty of other ways that a contractor can do work though on a home. 

I know that you would have to get the owners consent written into the lease and you would have to secure short term rental insurance.  

She likes the secure feeling of having it paid off.

It means you need to secure flood insurance which is in addition to wind/storm coverage in Florida.

I've built up some experience completing flips and buying rental units on my own – and now would like to start bringing some other investors into the fold to secure deals on a more consistent basis.

My sister can possibly secure a personal loan at low interest. 

If the seller is an owner occupant, he may have an LTV much higher than any investor can obtainThe main benefits to a seller is that the transaction is quicker than a buyer obtaining new financing, and that he may get a higher price because the buyer does not have fees associated with obtaining a new loan and the buyer may pay more for greater leverage or pay more if he can’t qualify for a loanThe downside to both is primarily that the buyers equity can be wiped out if the note holder accelerates the note, further the seller now has liability on a note secured by a property he does not own.

I secured financing using an owner occupied fifteen percent down loan.

To avoid the Due on Sale clause you can also put the property into a Land Trust, and assigning that to the LLC - that wont trigger the same alarm bells as the LLC for a bank, allowing for the same financing options you would expect.