I use to work as a project manager for one and I did two suicide clean ups when we where short staffed. 

What if one day the home owners association decided to not allow short term renting or possibly the state of HI passes laws banning short term renting (it's very controversial over here) and over night I go from a great cash flow rental to a rental thats in the red and possibly underwater if the bubble did pop.

Cash out refinance out of the short term hard money loan after 6 months, and get 100% of your cash back. 

Short answer, both!

The short version is that you have a ton of high-end rental competition all over the North Loop, NE Minneapolis, and Uptown and you're competing against Billionaire's (Think Doran Properties). 

Does the type of sale, whether, short sale, foreclosure, owner owned, depict if the price of the property can be negotiated?

Easier said than done :(, I am short on the time and this just came up.

Hard money loans are only short term solutions.

I borrowed 10k from a family member for an undetermined 'investment' on a two year payback, and shortly after stumbled across a four family I bought on an FHA 203k. 

@Jordan Bochner The short answer is, Yes you can own a rental property and use FHA to buy a primary residence.