I will also be owner occupying and want to be comfortable but don't want to over do renovations.

As a female she is going to want a certain "class" of roommates so she feels the most comfortable in her own home.

Elizabeth Colegrove I did ask my coworker if he'll consider renting the place, but he was not comfortable w/ the idea.

Once I am comfortable with the model, I backtest it and then I use it personnaly and tweak it as necessary. 

If you're comfortable with the cash flow and the deal, then the financials are fine. 

Even if they dont need the money, then they have to be comfortable with the arrangement. 

Our plan is to initially rent the unit to our daughter, who is highly allergic to cats.My concern is - can I cost effectively remove all traces of the cat, so that she can stay comfortably?

Take the gross income, x .43 then subtract reported monthly bills such as car, credit cards student loans child support etc. whatever is left is what the seller, or borrower, can qualify for. in other words...have them complete a 1003 with a lender to see. 

As far as the purchase of the properties you could do some research on owner financing and see if you and your mother would be comfortable doing a sub-2 or wrap.

If you haven't already, read through the this deal analyzing article. http://www.biggerpockets.com/renewsblog/2010/06/30...I don't know your knowledge level so if you are just getting started, take the time to read and educate yourself on the math so you can be comfortable with what you buy.