I live in Miami Florida and I pay over $3 per square foot in rent with some going as high as $5.

Montgomery Metropolitan Housing has a reputation of being difficult to work with and are slow to pay at times r so I have heard.One thing to keep in mind is that even with section 8, you still get to set your criteria that tenants need to qualify for your unit. 

your comment around "approvals will be easy to get" gives me pays if you've not done this type of project before, I understand your logic, and I don't know your local municipality but it always seems to me that no matter how easy we think a project or approval is going to be, something always comes up.

Is she paying a property manager?

I did not see marketing costs, nights that you need to spend at networking meetings paying for dinners or memberships.

What about having to break even, or even feed the property every month $200 for those same 36 months, but at sale, could net a $75K-$100K profit?

This seems unlikely in the long run. you are forgetting that someone is paying down your principal for you so you need to take that into consideration. 

I'd purchased it on a land contract, paying interest only for the first 5 years, with the ability to extend another 5 years if I'm not able to find favorable financing to refinance within that time period.

However, my portfolio is mostly B2B and the businesses I work with are comfortable paying the nonrefundable fee plus the refundable security deposit. 

Delayed gratification pays off!