If you decide to pass through, just make sure those additional net profits don’t move you into the next tax bracket.

You'll be a great addition to the forums with your experience!

Of course, you can definitely prevent this (or minimize the risk as much as possible) by having appropriate screening in place.So it sort of sounds like there would be no incentive to an owner to replace section 8 tenants. 

If the lender wanted to sell their loan, they would have to take a loss because of this defect.There are lots of schemes and ideas on how to avoid or minimize the risk that a lender (especially, the big banks) will follow through with calling a loan due because of violation of a "due on sale" clause.

@Daniel Caraway a lot of times properties like that are grandfathered under existing zoning unless, it was an addition done without a permit or it's been vacant for a specified period of time.There are fairly explicit rules at the county level that govern zoning.

I don't have much saved up (6k) and I have good credit (700+) with minimal/manageable debt.

It is always best to get these questions answered before the loan is signed to avoid additional costs down the road.

While I have extreme fears about providing income, her fears are on the risks of having additional liabilities.

Sounds like you're going to be a great addition to the forums from Day 1 with your experience!

We have 40 long term tenant doors between 4 entities and just about to dip our toes in short term Airbnb with an additional 5 doors which are being renovated right now.