Remember that principal payment is not a cost, but you eventually include depreciation.

I'm sure there a tons of opinions but personally I like to use one of two methods - METHOD 1: Clear out the bldg., carry out your renovations, this makes it easy, no Tenants to answer to or to bother you, clean slate... but no cashflow while underway. - METHOD 2: Leap frog...

My point, however inartfully stated, was the underlying payment obligation needs to exist to put others on notice. 

In order to not have to put any of our own money into this deal, we intend to leverage the equity of my Grandma's home as a down payment for the loan.2) Should we leverage a construction loan or some other form of financing?

A lot of people will tell you, and they are right, when you do a small down payment, finance, and str the house you should be happy to break even and have a vacation house that someone is paying for you.

A tenant destroyed a garbage disposal with a shot glass- the next thing in my lease was tenant payment for repairs not coming out of security deposit and specific terms for hourly labor charges. 

We made an offer based on what our down payment could buy.

The PHA will also conduct their own background check on the tenant.Sign a lease and contract: If you approve a Section 8 tenant, you'll sign a lease agreement with them as well as a separate contract with the PHA outlining the terms of the voucher payments.

Anyone have any experience with this second method ?

I also have solar panels on the property with a monthly loan payment of approximately $150 a month.