I started getting creative, decided to proposition them for a MASTER LEASE option (Thanks BRANDON TURNER "How I bought my home with low and no money down") Follow me on this one...

I will be redoing the flooring in the master bedroom.

I could also wall off a section and turn it into a master bath.

Its not that I can't do that, as you can see from my background I've mastered many careers in my life, but right now I just kinda want to focus on being the best property manager and real estate investor I possibly can - while putting away as much money as possible. 

I am looking to go back to school to retain my masters in real estate.

You may also want to research Master Lease Agreements.

But I know education on any topic is one of the best way to master something.

, I can offer a technical way of doing what you want...Deed the house to the relative; create a promissory note for (trivial amount) so that you can take "deed in lieu" when you want to sell - that solves the "so I can have right to sell".For renting, just create a (master) lease with your relative where you rent it for $1 per month and have the exclusive right to sub-let - that solves the "so I can rent it out".As far as "other legal decisions" - you'd have to be more specific but with the word "legal" in there, I refer back to consulting an attorney there.

If it is fairly turnkey ready, then one less expensive, lower risk option would be to propose your friend a master lease to you, perhaps along with a purchase option. 

Crown in main living areas (kitchen, living room) and the master.