Just like the folks on BP encourage partners without money to apply a skilled trade to get into deals, you're offering the same thing with development.  

The conservative way to do it is to take everything and apply a useful life to it.  

The Only thing you should be paying before closing is the appraisal fee, once you have applied for a specific property.

Can I separate out the heat on the lease, become a “vendor” (create another business entity) and require tenants to apply for heat assistance - thereby getting paid for the heat?

I would clean it, prime it with high adhesion primer and apply "porch & floor" paint.

But without a large down, the monthly mortgage will be too much for her by herself. my questions: Can she apply for a 203k, HomePath Ready Buyer and can I reap any tax benefits by investing but not living on the property?

Just because someone applies doesn't mean they get approved. 

@Gitit HefetzThe title company is likely going to ask you to complete form 593 which indicates how much withholding(if any) is required at the time of sale.There are many exemptions that you want to see if you qualify for so you don't have any withholding at time of the sale.If you do pay any taxes, they should be applied as a credit when you file your return.Speak to your accountant as he/she would know best.Best of luck!

I think 6 weeks will be the sweet spot, that I can recover and refresh, and will also allow me to get to know my new city and make some connections- That vacation will NOT be funded by my profits, but rather from savings already set aside for that purpose- If I don't take an extended break, It probably wouldn't be wise to pay off my car either, and I can apply that extra 20K to my next deal and use it to generate more profit.

Wait on the flooring, many lenders can close without finished flooring, or apply for a 203k (but then you are stuck with 1.75 in mortgage insurance) which can give you the funds to finish.