I would suggest an AirDNA report and any other documentation you can get from property managers, other hosts, etc. that support the higher income figure. 

That is the first thing you should do and then ask them and the property manager for the insurance and to get them involved.

Go to meetups in your area to meet other investors who invest in Section 8 rentals to see if that's the type of property and management style you want.

The cash flow on this one is more easily fixed by either getting roommates for my family members - they're open to this or they move out with the next lease expiration and I hire a PM to find me qualified rental applicants at market rate rent or self-manage it (don't really want to self manage in a pro-tenant city).

Out of state investor looking for an SFH property manager in Greensboro NC.  

Often, you have to use the buildings management program and I have seen them charge 50% of the revenue. 

Generally, I don't approve applicants who need reminding 

If it is a good deal then the right person will be willing to look at some private money options or even look to structure a partnership where they bring in the capital and lend-ability and you manage the deal for them.

Would the best practice be to form a new LLC where all four of us are managing members?

You probably know some of her details like income from her application.