(I'm thinking adding 2 Beds and 1 bath, or maybe a master with walk in closet and an on suite, a large corner home office, etc. raise rent to $1,600)Needs: Roof, Siding, and Basement Work (potentially more space if the basement is redone, adding a bedroom and bathroom, rent at $1,800?) 

Do you think it's feasible, or is it potentially too late for her to benefit from such an investment?

However, I will be moving into the property and doing a substantial renovation so can evict and reset rents to market.My concern is not the short term risk of rent control as I have ways around that (mentioned above).

With careful research and property selection, it's possible to find properties with good cash flow potential.

The more bedrooms you have, the more risks you can take without alientating a family with all boys (princes beds) or that are all still young (star wars).

Lower risk, lower reward.Flipping by yourself or with a partner is more risk, more potential reward(also more potential LOSS).

@Michael CaldwellI think the type of transaction is more important than potential tax consequences.

My investment approach required fixers with good value add potential.  

What makes the rental appealing to potential tenants? 

It depends on the type of lender and their risk appetite.