CMX-3 zoning already allows group living/boarding houses unlike normal residential housing zoning. that's the advantage of CMX-3. would love input on the other questions from others to the extent someone knows the answer.

You dont have any skin in the game so why charge any less than a normal contractor would all that would do is make his profits more and devalue your time. 

She would buy it as normal with a DP and bank financing.

There are investors that gamble on transition areas.

If she does not make enough to pay rent, is that process easier than a normal eviction compared to a tenant not paying?

Keep in mind normal wear and tear you can't charge for and carpet cost is pro-rated for the life of the carpet which is 7 years.  

I now live in a normal house that still meets my needs and I freed up quite a lot of money by doing so like you are describing.But if this new house doesn't have a 2nd bathroom and you really need one due to your kids, you will hate that and be kicking yourself later. 

Take a security deposit and treat it like a normal rental.Ensure wording is included that would include clear stipulations on what will happen when things close or if for whatever reason the deal falls through.

I have been doing a good amount of research and am considering taking the course since I have a discounted rate for 1/4 of the normal cost. 

When I was in Texas, it was normal to have a deposit, fees every month and an up front non refundable.