She earns a good living and has excellent credit but since she incorporated herself 2 years ago, the numbers worked against her when trying to get an approval.

But I was salary, no matter how much I worked I made the same amount, its taken almost 3 years of not being in corporate America to unlearn (and I still battle them every day) the BS ideals they preach there, and I'm certain if I had gotten into a sales roll from the beginning I could have used that combined with my work ethic to bank way more cash by the time 2017-2018 rolled around to start investing.  

The bedroom has a private bath and is coming furnished with a queen bed, night stand, dresser, desk, desk chair, and rug. 

I would pay $1.66M to acquire the business, which would 3x EBITA (~22k avg) + Assets (permits, chairs, tables, etc, $100k).

that does not benefit me in any ways that they get more comfy chairs and nicer desks, or that they hired someone that doesn't really have anything to do with my properties. 

If on a Friday evening the neighbors are sitting on lounge chairs in the front lawn smoking something that is not a cigarette, blasting music, and every so often a car rolls up and some sort of fast transaction/exchange is made, that would be a red flag. 

Key issues for us is minding the potential for medical malpractice reaching our assets (through sufficient insurance and proper incorporation) and finding ways for me to qualify as a real estate professional to maximize our tax benefits to offset hubby's income (if possible).

One thing you can do, other than checking for state licenses, incorporations, etc. is to check the public records to see how many mortgages are recorded in their name.  

@David Miller in the past I've never charged a acquisition or management fee for structuring a deal but I do like the idea of incorporating those fees going forward and putting them towards my equity position. 

If so, Where did you incorporate?