If you insist on getting your $5,000 when you aren't entitled to it under the law, and the taxpayer has made an issue of this, then you could be sued for refusing to let them redeem for the legal amount. 

Legal residents of other states are not required tofile a Georgia tax return if their only activity for financialgain or profit in Georgia consists of performing servicesfor an employer as an employee where the wages forsuch services does not exceed the lesser of five percentof the income received from performing services in allplaces during the taxable year or $5,000.3.

If I buy a Forclosure in Florida to Live In while rehabing and then plan to sell, is there a certain time frame I legally have to hold onto the property?

I could lease it from her for lets say 2 years with an option to buy when the legal / title ownership is all in her name.

At that moment you can still walk away from that tenant without any legal issues.  

This is in addition to the legal fees, servicing, FPI insurance, etc. 

Is anyone aware of legal issues around asking what their plans are for income once the baby is born?

they might affect your home especially if it is already adjacent to a denser zoned area.If the home has a verifiable history of use as a duplex it may be grandfathered legal.   

I have a copy of his, but I haven't used it yet.You'll want a legal professional who is an expert in this stuff to look over the note and help you figure out the notarization and other filing steps.

Would it violate any tenant rights or state laws to simply offer the tenant a renewal contract as the new owner or a notice to vacate knowing it legally has no claws and teeth?