To me it seems that it's only material if it will cashflow after the refinance loan is taken out and the 1% screening criteria should be applied to the ARV, not the purchase price which will be a distressed and low amount. 

The current rent is low for the market so there is a potential to increase with total of $300 plus the garage is not rented at the moment which is an extra $150 .I will appreciate any opinion or thoughts!

I wouldn't go to home depot or lowes for something that specific.I'm sure you're trying to keep costs down, but you may want to bid out a full replacement vs. the paint. 

We're fortunate in that the weighted average interest rate on both her and my student loans are pretty low.

You have to make the bet that you might do well, break even, or have a big loss.If a buyer has limited funds and net worth they do not need to get sucked in by the potential of high cash flow and landing nice tenants that pay on time and take care of the place with low income type properties.Think of this.Someone buys a piece of junk and hopes the building doesn't fall apart and the tenant pays on time so they can cash flow 200 to 300 a month based on current market rents for that product type.So 2,400 to 3,600 a year if everything goes perfectly with no surprises.

It's a small island and inventory is low.

Questions to ask a Hard Money Lender - What is the APR? 

Your closing costs are too low and you are self-financing the repairs in the report.

I would get a pre-lim report from title, along with getting the daughter to fill out a 'statement of Information' with the moms details so title can process to see if any personal liens are against the mom and the property. 

You will not likely qualify for bank financing with a low credit score and less than two years employment.