You’re currently paying for it twice- once with money, and again with your time.

Tenant/Buyer is required to put down nonrefundable option money.

She has already been great so far communication wise, she keeps the place spotless, and she has lived there 5 years, making me her third landlord while she has lived there.

That's a lousy spend of money.

Where can I go to borrow money to give the contractor in order to get the project started?

You can get creative with recasting mortgages, refinancing, etc. but at the end of the day these things cost you money. 

Your cost of living sucks in NYC so that hurts as well.You say you want financial freedom, but what you really want is time freedom and the only way to get time freedom is through earning money to give you that.

Currently I like the idea of having long term rentals for my future, but I really enjoy managing my place and think that I would enjoy doing property management as I would get to help others make money and help find a home for future residents.

If yes and yes money back or discount or sue and confirm they face penalties for failure to disclose and that they “remember” to disclose to next buyer. 

I actually work for a mortgage company and am a loan officer myself but as I just started i'm trying to wrap my head around all the programs and markets.My broker doesn't focus on investors so it might be wise to find someone who does and learn from them.