If you do place the property in her name, you've got a Gift Tax (Form 709) to complete. 

I understand I wouldn't get the benefit of tax deductions, but what else am I missing that makes this a good deal? 

Make sure to speak with the Title/Escrow officer directly to verify their wiring instructions to avoid being a victim of wire fraud.6. 

Also, there may be some tax benefits if they can qualify for federal funding based on low income. 

And of course we're in agreement on consulting a tax pro.

Michigan offers tax credits and breaks for development projects, especially in designated areas like Opportunity Zones.

Unless the borrower is self employed and takes a lot of expenses to show lower income on their returns then it usually makes sense to pay a couple thousand a year in higher interest (you can pay like 4,000 a year in additional interest for DSCR if you are saving 30+k on your tax bill kind of math lol)

He stated he turned off the breaker to the pump to avoid damage. 

Though I am unsure how I would amortize the up front remodeling costs for P&L, tax accounting.2) Interest only loans term loans -  Would allow current owner to have cash flow on the property, without eroding the asset value. 

Also, I'm not sure how you're paying attention to it on the tax side, but the unit that you are living in's profit at sale is calculated differently than the other unit that you're renting out.Once you move out, that unit is officially available for rent so from that point forward, any profit gained at future sale will be calculated starting from that point and will be taxable.