Pretty sure there are mental health issues, but she has support and will hopefully be out in the next week. 

When she called back she said her friend would officially give me the home for free.

You can absolutely do it without sacrificing family time, your own mental health or your sleep.

Btw, in my lease he would have had to given official written notice that he was terminating the lease and once that notice is given it cannot be taken back without my permission, so if he stays put then I would be able to treat him as a hold over tenant, in which case per state law rent doubles automatically.Be firm, be fair, and get paid! 

If you wanted to do a commercial loan that didn't have a guarantor (i.e. didn't depend at all on your personal credit-health) then you'd need to use a product that is fully "contained" within your business.  

It's R10 (In Nashville that means two units is allowed as long as lot is 10,000 SF which it is) so a second unit should be fine, but if I have codes come out to make the apt officially legally livable, what would happen?

@Jaeseok An advice from experience host like yourself just to be prepared on what to expect when I officially start from the good to the bad

My official day job is giving them the drug screens at a medical clinic. 

I also just finished Rich Dad Poor Dad, the seemingly official bible on entrepreneurship.

Actual cash does not have to exchange hands.This sets the incredibly important precedent with the tenant that rent is separate from capex improvements and these improvements must be handled with your authorization and in an official manner.