Get the lease to cover your holding costs at a minimum if you're in the flipping game, or offer lease to own if she wants to stay until she's back on her feet.The best solution is probably the one that causes the least stress and upheaval which is the last thing that family needs right now. 

If you are trying to do something in SB it's unlikely HML will be the correct solution.

I suggest using another property type for the listings, I know that is not an ideal solution. 

Find an Airbnb property managerThis is a great solution for those homes that are on the border of appraising as high as they need to for a lender to meet their minimum loan amount and not have you lose out on spending that extra amount on rehab that would likely not affect the long-term rental numbers by an equivalent amount.

The only solution I found was to just mail it in, so that's what I'll do.

I think your second solution is a better option if you have no other tenant applications coming in and you're wanting to fill your property soon.

The solution is buy the property.  

Find out their need and their wants and you become the solution.  

The only solution I think I can do is only pay for the 1st mortgage....can you guys please help me find any other solutions?

However, there is a very Darwinian solution here: let the anti-LLCers structure things the way they want.