As far as being your own GC, also known as 'Owner/Builder', everyone should be aware that most states (California is one, I looked up GA and it seems they may be as well) do not allow an investor to act as a GC on any property except their primary residence, and even then there are limitations.So check local laws before starting down that road.....

.* The best wholesalers are usually real estate investors who are exceptional marketers and generate too many deals so they start wholesaling their overage to their friends.** Use a contract that has been vetted by a local attorney who knows what wholesaling is.*** Make sure you know how to estimate repair costs.

The best way to protect yourself investing in NYC is to buy higher quality assets and require exceptional credit credentials from your applicants to obtain approval to rent.

Now..of course.. the opportunity in California is usually greater..but it's all relative..except for sales tax.

You got bad advice from your prior accountant.You received rental income and it should have been reported.it seems like maybe he was lazy and/or doesn't understand rental concepts.The only exception is if he is paying 'under-market' for rent in which case the property would be considered personal use.I would fix the issue and charge him market rent. 

Renting by the room is almost like running a Bed & Breakfast or hotel except for longer term stays which is why they often are not allowed in R-1 residential neighborhoods.

If I Refi, I will pay him back against my lifetime exception, or if not I'll pay him and his wife $x each year, in accordance with IRS gift tax limits.

This is not lucrative to the seller at all except in getting the property sold.

Possible perhaps but I don't think probable.While there have been some exceptions and special programs that perhaps pay a bit more than market rent, I don't think it is that common.

There are exceptions of course but we usually want to work with smaller, local loan officers and brokers are usually the best option - usually.