Due to the creativity of the deal conventional funding is not an option.

I care most about the Internal Rate of Return (helps me determine how long to hold a property), the cash on cash return (helps me decide why this investment vs other options, and it also takes into consideration appreciation of the property!)

Beyond carefully vetting the tenants, how can an investor protect themselves from squatters if we want to sell years down the road?

Be careful.

She would be putting all the cash down for the property and I'm a contractor and would take care of all of the rehab work along with finding the house, dealing with real estate agent etc. how can we make it so that it would be 50-50 ownership of the property and all future profit? 

Definitely tread carefully here to avoid any discrimination claims!

Are there other more creative ways to start cash flowing in year one Be careful because federal mortgage fraud and going to jail is a real thing.

Now the situation has occurred that we need to rent the house out in order to help pay for his long term care expenses. 

Can't say what's hardest, too many moving parts but take care of your tenants and build that goodwill, pays off in spades.

Conventional 20% down.