Her idea at present is going to be to purchase the house herself (using traditional financing - high interest rate) and make the payment affordable for the family's rent to cover by arranging the sale well below market value and putting up a down payment of 30+ % of her own money, resulting in a PITI of ~1500.

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

Part of Florida's mechanic lien statute:713.06 Liens of persons not in privity; proper payments.—(1) A materialman or laborer, either of whom is not in privity with the owner, or a subcontractor or sub-subcontractor who complies with the provisions of this part and is subject to the limitations thereof, has a lien on the real property improved for any money that is owed to him or her for labor, services, or materials furnished in accordance with his or her contract and with the direct contract and for any unpaid finance charges due under the lienor’s contract.

Any ideas?

Regardless, you sort of need to take two steps at once: A) talk with an attorney to understand your options and nuances of those options and B) start having conversations with people you might think would invest with you to understand if there is any real interest, what they are looking for and if you can realistically offer that to them with what you are doing.Once you have that, then you need to understand underwriting with investor capital, proper fees and profit splits, taxes, reporting, etc.

Proper research and budgeting are crucial.

Some books I read state it’s a good idea but not necessary, others say its a very good tool and consider it to be necessary.

As I have had first-hand experience, and also know someone enough intimately to where nothing was drawn up against them simply because of the proper structuring. 

It's definitely a good idea to get in the habit of tracking expenses related to that property separately.

When Max purchased this property, it was with the idea of keeping it for longer and having it rented.