This is nothing new and has been going on for many, many decades, with vacation rentals, hotels, bed & breakfasts, etc.

The house is a 4 bed/2 bath in a B neighborhood, conveniently located, zoned to decent schools. 

Therefore trying to get a bit creative with the financing.Positive cash flow will almost be impossible (as I'll have to probably take one bed away, and then build a bath and a kitchen) in what I've been finding, so Im trying to offset the mortgage as much as possible.Long term, ideally I get to keep it and the 2nd unit adds to the cash flow if I ever dont need it anymore. 

The stream bed in question is small/ephermeral, and the properties haven't flood in 12 years, even when the local area has seen some massive flooding in the last decade.  

See below for the numbers:Home Market Value: ~525kLoan Balance: ~476kEquity: ~50kMortgage Payment: $2570Rent Price: $2650Property Manager: 10% (potentially 7% w/military discount from a referral I got)Cashflow: $-185/month, $-2,220/yr1st year Equity Payoff from tenant: $11,561It's a 4 bed, 3.5 bath home built in 2011 that only requires some new paint to be rent ready.

And I'd have to spend $10,000 to $20,000 I imagine to buy furniture, kitchenware, beds, dressers, etc.  

All my property are 3 bed 1 bath and all less than 1000sq house.  

This is DR Horton SFH, and is a newly built single story 4 bed, 2 bath that is surrounded by expensive MI homes. 3) Move into the townhome. 4) Use my $130,000 HELOC as an emergency if rent defaults do happen and save for a year until I reach my emergency fund goal of $41,000? 

Okay, four examples from the past three months of homes/condos me or clients have purchased that are in zones where vacation rentals are legal:  Unit 1:  2 bed/1 bath purchased for $225k, currently finishing up construction to update and make it a 3/2 bath that will sleep 8-10 people. 

Eg if you charge 1300 a month for 3 bedroom charge 150 weekly and fill 4 beds (1 room for sober house manager) = $2400 gross.