My wife and I have been doing an MTR-exclusive startegy for 3.5 years, and we still have a hard time figuring out how to predict vacancy, especially in a new market that we're considering.If we look at FF's (pretty crummy) data on their website we either see very few listings, so we think "no one is investing here; bad" or we see a lot of listings and think "too much competition; bad". 

Option 2: I found a house that the asking price is 930k , but I’m sure I can get a discount on it because it needs a lot of work , it doesn’t qualify for traditional financing , so I would need to take a hard money loan , it needs about 150k worth of work , the plan would be to offer the full 930k asking price but ask for a 6% seller concession , I calculated 20% down payment and 7% closing cost , so total after seller concessions comes out to 21% down payment which is $195,300 .

The seller was motivated to close quickly, and we negotiated a favorable price of $80,000, allowing us to secure the property at a discount and capitalize on its renovation potential.

I feel the value of this condo is at its peak considering the market.Are there any legal exceptions for the 121 home sales exclusion if I buy another primary residence shortly after the sale to avoid tax?

The guests are a couple who exclusively do co-living properties just like you are describing.

If the numbers don't match what you think you would like to make on a property, then either you need to discount the asking price to get there or pass on the property.My second thought is what you're feeling and others have highlighted - no everyone is in the business to make it fair for both sides.

For myself, I am a high income W2 earner and I currently have FEIE foreign income tax exclusion but at some point I have to be able to return to the USA fully or at least hedge against that possibility.

Well, I'll repost here what I originally did in response to the email from Vrbo that some people got saying Vrbo was giving a promotional discount to prospective guests, and hosts could opt out if they wished. 

Operators that are open and able to offer combined usages for slower seasons, such as mid term discounted extended stay rates in the winter, can improve lower estimated production in the off-seasons. 

When I buy stuff or services at retail but buy assets to pay for them at a discount, it's like buying those assets and services on sale.