If the tenant is truly struggling due to a life event, the sooner we can work together to get her somewhere she can afford (and not have an eviction or negative credit report on record), the better for all.

If you don't plan on paying cash and have to leverage with an owner-occupied loan product then you should set up your LLC as a property management company because you will not be able to borrow in the name of the LLC.  

Investment product marketers who claim to be GPs, GPs who claim “ownership”, insurance salesman who claim to be “financial advisors”, people who attended an executive training program claiming to have an MBA, what ever happened to honesty?  

Which is also one of the 3 fundamental needs of a business most often (customers, product/service, place of operation). 

I an afford to sit on this property as its in the Yosemite AirBnb hot spot and don't need to do anything right away as its in a killer location.

If that makes home buying affordable without putting you in a pinch financially, go for it.

You all not be able to raise rents 50%, the renter in place will not be able to afford it.

You might be able to afford a "better" property then.If you invest somewhere else in a vacation rental for example, you might also discover another place that you might like for retirement as well that might be more profitable.

Section 8  rates (and lower) will also give you a rough idea of what your market rent will be.Yours is an object lesson in the mistake of buying what you can afford up front rather than what is a good opportunity.People just starting out should only buy local, that they themselves can inspect and get a feel for.

This is a growing trend in rentals to increase cash flow and help your community with affordable housing!