FHA mortgage insurance is a bear and expensive, but somewhat offset by very low 30 year fixed rates (usually below Fannie and Freddie rates). 

Bear in mind while you could incurr a capital gain tax of $175k if youre reinvesting you can use a 1031 exchange to avoid the tax. 

(Bear in mind I'm in Texas, so there will be nuances in different state, but a lot of these principles apply universally.

It is a business decision to get her out and bear the expenses.

Tenants bear all responsibility for legal or other costs and liability.

oh they are interest bearing too.

If such deals could be done here, you can bet your mortgage I would be doing them right now.As far as reghab flips, I have always been doing medium to heavy rehabs, in fact, I can only think of two properties where I just did "lipstick" and all others had full kitchen and bath gut/remodels, many had new windows and stucco, some not, all needed landscaping, paiting, flooring, electrical and plumbing fixtures, etc. many of them also had minor wall removals (non load bearing) aqnd repositionings.One of the things I miss most about spec over rehab is that you do not have to ever worry about fixing some other moron homeowner's messed up work.

Not sure what the market will bear in the longer term.

There are costs that eat into their income.I've had no shortage of people see my house and I have a no pet policy.A weight limit on dogs has no bearing on whether they will tear up your house or not. 10 pound dogs piss all over the place too. and 50 pound dogs could be very docile.One of these days, I'm going to do a pet experiment, and see how much better the applicant pool is.

You're smarter than the average bear.