This probably seems attractive but at the same time if it stays unpermitted it can be head aches along the way and if i were to ever sell in future run into the same sort of problems. 

As investors our job is to produce high quality end products, worth hopefully significantly more then what we paid.

If you're struggling, consider offering higher returns initially to attract investors, or partnering with someone who has a solid reputation in the industry.

But I would be taking a huge tax benefit up front and making these properties much more attractive from an ROI perspective when modeling for that expected benefit. 

You can find some deals on the market, but they are definitely the lowest hanging fruit and always attract a lot of attention.

It also depends on the type of properties (some less expensive ones attract more problematic tenants) and the local laws around rentals.

The really attractive part of the loan is the idea of not having to put down cash as a downpayment (even though I do have cash available since I was initially anticipating going with a Conventional 30-year loan).Is it fine to assume the risk of interest rates going up for the sake of putting 0% down?

Below is a diagram illustrating the three main tenant segments in Las Vegas.If you unknowingly purchased a property that attracts the Transient tenant segment, turning a profit will be nearly impossible due to high vacancy costs.

I was recently tasked with finding an unheard-of market that could potentially attract brand-new STR investors.

If you don’t have the money to buy your own deal, then I see how arbitrage could be an attractive option.