We'll keep the property in the family and use it as a rental, with capital improvements along the way.

Appraiser will of course see your purchase price and treat it as a data point, best way to overcome that is to hand him a before/after binder that includes all improvements you've done to the property etc. 

I'm curious about something though, if the PMC has been given a clear profile of what a qualified tenant looks like and they put someone in a unit that they haven't fully screened or for some other reason slips through the cracks, shouldn't they have some financial responsibility for the lost rents, cost of evictions and any required rehab work that is a result of that? 

The one that I'm sure I have a lot to improve on is managing contractors. 

Also, It's great to hear you like cozy, that is the exact program I was going to use, have already created a profile.

Are you planning on trying to force equity by fixing it up and making improvements yourself?

You need to review the PM contract to find out.Moving forward, it is wise to have healthy reserves for capital improvements.

The quality of tenant is the variable, most people that need section 8 are good people who just haven't quite figured out how to improve their situation in life, they just want a place to live and will generally behave if they have a solid, clean, safe place to live.Make sure you check local laws and rules around section 8 so that you don't get yourself in hot water, perhaps get in touch with the existing owner/property manager and see what there experience has been with section 8 and especially the current tenants. 

What financing options would I have if I wanted to purchase land adjacent to my home without building improvements on it?

Not getting it rented or not for what you expect to get or having to improve the places to get the rent you expect.