I was told the investor pays to lease out the entire flat for 6-12 months and then sub-leases the individual rooms for a profit.

A few things to keep in mind:Section 8 requires the property to pass an inspection based on HUD’s Housing Quality Standards (basically making sure it’s safe and well-maintained).The rent you charge has to align with Fair Market Rents (FMRs) in your area, so it’s good to check what similar properties are renting for.You’ll still be responsible for maintaining the property, but the upside is that a chunk of the rent is guaranteed by the government, which can provide steady income.Check with the local housing authority about any specifics for your area—every jurisdiction does things a little differently.This could be a great niche if you can find a good deal on the land and make sure your expenses (like maintenance, insurance, and occasional vacancies) are covered by the rental income.

I'm looking to connect with other individuals who are putting their money to work via short term lends.

If duties were merely split between operations, capital raising and deal sourcing based on individuals strength and to spread responsibilities, I would be more understanding but that's not the new age model.

The individual agents/teams within the brokerage are the ones that set out to establish a niche to work with investors.If you're looking for a broker primarily focused on working with investors, you may want to speak with commercial brokers and agents.

It also gives you the opportunity to be creative on how you want to vest/take Title (LLC vs Individual name). 

Not many would risk everything they own if that was a requirement of investing in a business. if you’re referring to FRAUD”, then the individual committing said fraud can be sued individually, and  can not claim remote entity protection since they and not the entity, or they in addition to the entity are guilty of fraud.  

If you get a section 8 tenant the authority will need a closet and outlets as well as the egress you mentioned.

My current focus - what is the process once a family member/individual has passed and lets just say in a perfect world probate has been filed and the respective family is now thinking about selling the property.

Not only would you benefit from having a partner's input on the deal, but you would also have an experienced individual to work alongside with as you navigate the project.It's also important to make sure you have identified your "team" ie; contractors / realtors / lenders / insurance agents / title company / etc.