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My current mortgage is in my name, however, I was debating on switching from the FHA/203k Loan to a Conventional Loan based on the appraised value post renovation (even though, I should do this after the house has a track record for performance to appraise on the cash flow that the house can operate at). 

With a wrap you would still have a security interest and could foreclose and (try to) take the property back.

My options are: 1) to post a "three-day notice to perform or quit", 2) write her to indicate the lease violation and allow her to break the lease now to find another suitable apartment.

Penalties for missing the deadline range from $30 $100 per form.

Other issues - What is securing the construction loan. 

Of my rentals, my ex-Home is my worse performing property.  

Our goal is to secure properties (amount tbd) to help supplement our retirement.

Lesson learned about the lockbox and getting a security system we can take to all properties after it’s sold or rented.

If all fails and collapses, you want to have a place to live that you feel secure in.