So, if you buy an older home it's typically much cheaper, since you're not paying much for the structure. 

They perhaps can build cheaper than you can, finance cheaper, operate cheaper and to get it leased up, offer things like 1-2-3 months free rent. 

However, if single-family homes prove financially viable, I’m happy to continue building in that niche.Since these homes and projects are significantly cheaper than my market, the risk is relatively lower for me and can do at least two at a time.The ChallengeOne of the biggest hurdles is finding reliable contractors and subcontractors in the area.

2/2 vs. 3/2 properties: 2/2 is smaller, thus cheaper to operate and lower price per night than a 3/2 all other things being equal.

It may even take a 3-5 years to get cash flow positive but if during that time it is cheaper to own monthly, than pay rent, you are way ahead.  

Contributing to a Solo 401(k) or SEP-IRA can reduce taxable income, and Section 179 or bonus depreciation lets you deduct equipment costs upfront.

This is the reason homes are so much cheaper than cost to build.

that will cut out many of the "best" areas even in cheaper markets.- You can look into call kinds of economic growth and financial indicators as well to help narrow the list.- I've also heard of people choosing a market because the team they could put together in that market was the best team they found

The other thing that I would look at is private money too you can get it for cheaper and less pricy as they can make their own terms with their money.  

Any excess proceeds not applied to the investment portion may be taxable as "boot."