I appreciate your input on the situation and am glad I posed the question to the forum. 

She’s a friend so we really want to handle this situation well.

These are all conversations you will want to have with your attorney and CPA so that you get advice specific to your own situation.

So unless your into similar situation, it is better to cash flow positive on day 1 if house price has little appreciation in the future.

Depending on your state's requirements, I usually will buy decapitated ugly homes directly from the public with no agent involved and in those situations I have a disclosure that states specifically that the seller is selling the home significantly below market value (I also wrote the the ARV in there so theres no evidence that the seller or buyer didn't know what they were buying/selling).

This is always a tough situation.

If you don't care how it looks you could put it in conduit and surface mount the conduit and paint it to match the wall color.I would get someone to tackle this immediately and communicate with your tenants so they know you are working on the problem.I would make sure your heat is handled first if this is affected.Then work on any other 240VAC circuits such as dryers, stoves and hot water heaters if applicable.Then get the lights last.I would try and do this without moving tenants out.I just had a 2 story house rewired and it took a week but they worked around the one guy that was living there and he was very understanding of the situation.

Fortunately I was able to cover most of the additional expenses from the overage, but it wasn't fair to my partner into such a risky and stressful position.

I originally was planning on buying a house just as a residence, but after listening to the Bigger pockets podcast and reading Rich dad poor dad, I want to make a smarter investment.I am in a unique situation because I work for the police department and my primary residence is required to be in one of the five boroughs or Long Island.

While it took until the 15th to get all the rent, it gave her tremendous peace of mind knowing the rent was being paid each month without her involvement, and I felt better knowing I was guaranteed to get the rent without excuses, stress or late fees.