Of course, talk to CPA as they said previously. also ask if you could collect rent and put in a money market or something for her as a forced savings. 

Do you think they would want more work & more money?

In my opinion, given the uncertainty of our government and stubbornness of inflation waiting around is not your best course of action.I'd cash-out asap and get that money into a CD generating a boring 5.5%.

I drive an old car and only spend money on travel, not extravagant. 

You make your money when you buy, end of story.

I don't have the money right now to buy a property to fix and then rent but was told it's still possible.

You of course have to find a deal that will allow you to make the extra money that would pay for that.

Insurance companies are in the business of making money, not paying money out.

Even better, call it your personal residence but AirBnB your personal unit while you stay at home ;-) Of course, you need to find the right area that will have demand, but you'll be cash-flowing well and still have money in your pocket for reserves or the next opportunity. 

Buffalo is a great place to invest, but its easy to lose money if you put the wrong tenant in place or get a fair housing violation.