I think they are struggling and throwing spaghetti at a wall hoping something sticks.  

I personally think you're in a great spot because you are asking questions and not just throwing your money around. 

Obviously we are tempted to try the cheaper option, but we know there is a catch, it's that cheap for a reason.

I was also thinking maybe find a home for cheap and restoring it for myself with a construction loan.

Lots of cheap areas look really high COC but then you have an eviction or lots of turnover costs and the COC in real life gets way lower.

. - LLC doc sets are fairly cheap and easy to create these days (with limited assistance from lawyers) and its much much better to have that cover bases on arrangements like this - it will also fit nicely with financing options - whether you take on debt from a lender in a co-equity situation like your first plan (refinance loan to LLC post rehab?)

HomeGuard is not cheap so I want to make sure this is worth spending money on.

I had to give them the bad news, there were no beach properties that cheap and the real prices are $1M to $5M.These articles pull the sales data for zip codes which can span over 100 sq miles, but then show the income data from a small area (1 to 10 sq miles) within the zip code. 

I have heard it's relatively consistent with cheap housing (cash flow comes to mind).

Upgrades to the house, improved kitchens, bathrooms and the like will yield a return when you sell of course.Getting into STRs on the cheap has gone the way of the dinosaurs.