You are 100% correct on this, which applies across the USA and aboard.

Just paying the taxes gives you no legal leg up on owning the property.....that is misinformation.....maybe they are referring to Adberse Possession which wouldn’t apply in this situation typically......state laws are specific.You are going to have to talk to a probate attorney in Your state.  

Financing:  My credit is good, but again I want to clear up some personal stuff first for peace of mind. 

Will be looking to apply. 

Flipping houses and owning rentals are only similar in the sense that the underlying asset is property -- beyond that, they are completely different strategies that fulfill completely different investment needs.Every investment strategy requires you put in some combination of the following:- Time- Cash/Credit- ExpertiseAnd every investment strategy generates some combination of the following:- Profits- Cash Flow- Tax BenefitsWithout knowing what you have to put in and what you're looking to get out, there is no way anyone can recommend a particular path.

This applies to affluent individuals with top 1% income, as well as those that need to pinch pennies.

@Jeff Whelan Yeah it seems @Christopher Phillips didn't understand that you're talking about a house you've taken over the payments on.I'm not sure about lenders in the US but here in Canada if the seller shows them the lease they will only credit 50-75% of the income toward their income for the purpose of DTI calculation.That's probably the best your seller is going to get if you've taken this property over on a lease option.

He is one of two people applying to rent the apartment, and is a high-functioning autistic adult.

I'm trying to find a strategy that satisfies the below requirementsMotivates potential tenants to apply and lease quickly (a weak pressure sale tactic?) 

Father's removal will be a gift to daughter for federal tax purposes and a gift-tax return will need to be filed, and unused lifetime credit will be reduced, or, if already all used, gift tax must be paid.