Then you have all the TV shows that glamorize flipping etc.. so its no wonder there is so much interest in real estate right now.Then you have the I quit my day job to be a full time investor..

Analyze properties by looking at gross rental income, operating expenses, and the debt service coverage ratio (DSCR above 1.25 for rentals).

Long answer: Let your tenants do their job, which is paying off your mortgage. 

Just make sure you are saving towards those slow months during the peak months, buy a deal at the right price (don't overpay just because its a turnkey STR or you think it will make more money than projected), and look into ways to increase bookings during those slow months with some marketing and operation tweaks. 

Commercial Revenue Generating properties like office buildings, apartment buildings, retail centers, etc (banks call it "CRE" lending) are typically evaluated from their net operating income, not gross.

@Marcus Stokes, house flipping is a full-time business operation, even with current market conditions.

Franchises work for a reason, but inexperienced operators are why they fail.

Annual net operating costs for option 1 are basically the same as the annual revenue.

If so, you'll need to figure out why you're not making money - is it other operating inefficiencies or your debt terms?

It's the lenders who usually require that the property is listed under an entity, depending on the state that they operate on.