Or if those big companies don't want it, is that an indication that no investor would want it?

The answer is NO, based on the language of Section 152(c)(3)(A):...an individual meets the requirements of this paragraph if...

Individuals are purchasing these properties, rehabbing them, and raising rents.

I’ve been around real estate for decades, and I read in The Economist once that in lively markets like Charlotte, folks will pay a premium for a comfortable room if you’re near major employers.A friend of mine tried something similar out in Austin a while back.. he’d inherited a 4-bedroom property and split it into individual room rentals.

Our systems have caught people using SSNs from deceased people or the SSN indicates they are 2-3 decades older than their driver license birth date.

I focus heavily on the sell side and on the buy side only work with high net worth individuals so the newbie wanting a 400k multifamily with an FHA loan probably isn't for me. 

It was suggested that we create an operational company that will lease rooms to individuals in recovery.

After reading so many intros of young, single, eager individuals, I'm hoping I'm not too late to the game! 

These costs for most of the individuals are considered personal in nature (unless you have a RE portfolio that is run like a business; see below).

Signing an exclusive agreement with a real estate salesperson indicates to them that you are committed to finding a property.