The only other option that comes to mind is to make the improvements and try to achieve favorable rental rates to push the story that 2 BR homes rent for a premium because its unique.

In your experience, does one approach lead to better appraisals, loan terms, or overall outcomes?

A 0% APR credit card is a smart move for materials, but for labor costs, you might explore a private or hard money lender, especially since your loan term is only 3-4 months.

What should I be aware of in terms of fees, timelines, and potential compliance issues?

I would have asked you what your long-term goal is but you have already thought about it.

Each option has its advantages and disadvantages.Finally, think critically about your long-term strategy.

Cash flow is defined as the money left over after paying for all expenses, including setting aside a certain amount to cover projected expenses like maintenance, vacancies, or capital expenditures.EXAMPLE:Property Price: $250,000Down Payment (25%): $62,500Loan Amount: $187,500Interest Rate: 6.5%Loan Term: 30 yearsMonthly Mortgage Payment: $1,185Monthly ExpensesMortgage Payment: $1,185Property Taxes: $250Insurance: $100Maintenance (10% of rent): $250Vacancy and CapEx (20% of rent): $500Rental IncomeMonthly Rent: $2,500Total Expenses: $2,285Cash FlowNet Cash Flow: $215 per month 💰However, there are many other factors to consider.

How feasible would it be to transition her to Section 8, and how long could this process take in Brooklyn, NY? 

You will never get that back in terms of additional cash flow

Then do a thorough research on tenant applicants (note: leaving this to a PM may be hazardous to your financial health) and choose the one that is most “stable” with the best potential for long term tenancy.This advice is contrary to maximization of rental income, but IMO will reduce expenses of tenant turnover, property damage, property management fees so much that the difference in bottom line income will be quite small.