As a starting point I suggest being within arms reach of your first project if only for the education and experience of being involved all the way through.

For me, it depends on the scope of non-permitted work, and the apparent quality of the work.If it's an addition, adding square footage, I can see it being an issue come taxes/appraisals/etc. 

Also, if you have family members involved, I would start looking at the larger apartment complexes where everyone would get more bang for their buck.

My sibling owns a separate business that I am not involved in.

I don't really have any experience with real estate investing, though I really want to get involved.  

That involved updating the kitchen with new cabinets, flooring, sink, appliances, made the living room / kitchen an open plan.

Yes, the involvement of your daughter is disturbing and totally not OK, I would tell the Mother (owner) that this behavior is unacceptable and if she is not sympathetic then don't worry about burning that bridge, it wasn't worth crossing.

You need to get an attorney involved ASAP.Look for someone through the Mass Bar Association who has a track record in defending these kinds of cases. https://www.massbar.org/public/lawyer-referral-ser...My understanding is the same as yours - if a property is not inspected and approved by the local housing administration (the local authority that administers Section 8), then Section 8 renters are not able to rent there.It's just a guess, but if your PM said something like "we don't rent to section 8", that could be the basis of the complaint. 

They both involve finding good off market deals.

I am a newer investor, involved mainly in SFR in Gardena and Hawthorne area.