Are there alternative/better financing options for this plan? 

If you are only making $600 a year - you can easily call that negative cash flow - because the first repair you have to make will probably eat that amount up.I would encourage you to compare whatever deal you are looking at to alternative uses of your money as to investments.  

Tesla is building their new semi-truck factory next to their battery factory, Microsoft, Apple and Google are investing millions into data centers.

$50k is not enough to make alternative financing work because even at an embarrassing interest rate the investor will only make a few thousand - not enough to justify the time, document prep, risk assessment etc.I'd suggest that you get a realtor to put up the money, take a mortgage plus a few points of the selling price.

Alternatively, should I consider purchasing several single-family homes?

Your closing attorney should be able to explain your options if your real estate agent can’t offer alternatives.

What a nightmare:1) Lack of transparency and inconsistencies in their internal policies so it is difficult to get proper help from their "Success" team when they give conflicting information.2) We are listed as a quiet retreat space as an alternative the raucous downtown Nashville scene.

One other option, if you haven't tried this already, is to see if you can contact their Customer Service to see if they will make an exception.Here's an alternative way of thinking (probably not helpful) - do you think the automation is worth more than $120/month?  

You may want to consider short rentals as an alternative and not renting rooms.

I'm happy to consider alternative perspectives, but prefer perspective backed by analysis (and preferably not by someone with an agenda to advance).