I already own investments in that area and have an established team in place.

So, the difference in price & closing costs would establish firmly the amount.

FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year."

I’m not creative when it comes to interior design and wondered if I should bite the bullet and hire a professional to establish our interior design theme.

You mention not having much credit established, but do you know what your score is? 

The law also established a slush fund for "legal services for tenants", meaning that we can be sued with our own tax dollars.

I don't mind committing 2-5 years to get everything running and established, so long as by the end of that time frame any portfolio I have is set up in a way to set it and forget it.

The wholesaler probably doesn’t believe the deal will close, just wants a contract from you and sellers failure to sell as agreed so he could establish the lost profit due to seller’s non performance and sue for the $15k differential which is easier to win rather than specific performance. 

I bought here because it is an established STR market with existing regulations.

Plus if you do not have a well established team to get your project finished up before the end of the summer selling season, you may not get the return you were expecting as holding costs and declining values are eating profits.Option 2 sounds like a safer bet, but yes you will have to cover some expenses and may have to carry the property with your own cash until rent prices appreciate enough over the years to cover your mortgage payments.