@Jack B.ANYTHING, as you pointed out, can be faked.BUT... if you are doing that for an apt, you risk committing a crime by falsifying information.So, let's say a tenant has the following:- NO CRIMINAL HISTORY from the Report- HIGH CREDIT Score from various sources- Qualified and Verifiable Income from their Employer- NO EvictionsAfter checking all of that, they then submitted a FALSE 6 months bank statement?!

Multi families are the way to go from a mitigating risk standpoint (more doors = smaller risk per door), but more doors also = more tenants which CAN (not always) lead to more problems, just something to keep in mind.

The risk, and headaches, are far too great and only magnified by the fact that they are not present to easily manage any problems in person.

You lose a lot of control and open yourself up to a lot of risk.

They will all be selling that loan to the secondary market and don't want to risk their license, their reputation or their freedom for mortgage fraud.House hacking is one of the best ways for individuals to build wealth; I am convinced of it. 

I am struggling with how to weigh out the risk of it being such a small town.

So, if you're not going to do the work yourself, or if you don't have some magical contractor that can do it cheeper (and better) than anyone else, the only reason not to buy it finished is if the price you get it for, combined with the price you're paying to fix it, combined with a very healthy margin for your risk and the inevitable surprises....

You may be inexperienced but from your post it appears to be in a  good way where you want to minimize risk by having as little debt as possible.  

Talk to the bank and make sure that they won't do that, if they will then it puts her at too much risk. 

I'm not comfortable taking that kind of risk at the moment.Additionally, fix and flip requires knowing contractors and dealing with all the logistics of doing a rehab.