At that point my current HELOC will be free to be used on the next property and I will rinse and repeat, so "yes" this is a financing variation of BRRR.

If we did everything on the inspection reports, then the property would be worth more so we refuse to play that game.

This is not a cash flow play, and projecting a %3.1 return makes it a challenge to operate.Good LuckGino

Section 8 can be a very smart play, but it's not great for first-time investors who are not planning (and have the resources) to continue the play to understand and perfect the obligations and to ensure the best renters.

I am figuring out what I want to build next that will have the best equity play but still crush as a STR.

I'm curious to hear how it played out.

It's almost always worth owning a house in a very good area, very rare it's not worth it.Making it a STR is just a hospitality play, the underlying value is the asset.  

The play is a 3 to 5 year hold, raise rents to get the valuation up to 600K and liquidate to 1031 into another investment.

I think that would play a big factor in how I would respond. 

It just means landlords and tenants play the game of making the bedroom look not like a bedroom during an inspection.