My biggest concern is managing additional units and tenants.

Not sure the cost of this for you but I feel with hot tub and fireplace you already have a lot of warming options and not get much additional revenue.

DSCR loans go up to 80% of the purchase price and depending on the Debt Service Coverage Ratio and your credit score you can expect rates on a 30 yr loan ranging from High 6%- Mid 8%. 

Additionally, FEMA updated the local flood maps here in July 2024 and much of the area now requires flood insurance. 

Additionally, do you have any other ideas or strategies that might help achieve his goals without incurring a tax liability?

They forget time is money and the PMC shouldn't be expected to do this without additional compensation.Also, many owners are too focused on the cheapest price without understanding all the potential pitfalls. 

In addition to interest and repairs, you can deduct off a 27 year depreciation on the home. 

What they said.....everyone over the age of 18 has to have a background/credit/ ID verification and sign the lease.

Over the past decade, I’ve built and managed purpose-driven homes in CA that serve communities while generating stable, long-term cash flow.In addition to running care homes, I also consult with aspiring care home owners across multiple states, including Texas, Arizona, and Michigan (Detroit area).

A couple developers we work with skip LIHTC and the tax credits and go the route of impact funds to help alongside other debt and sometimes equity.