From my experience selling RE and building new homes your just not going to please everyone

I'll add on to what the other Ben said and mention that there are exceptions based on the # of days that you rent out your home to where the income/expenses are excludable (being lesser of 14 days or 10% of total usage if under 140 personal use days).

I am five months in quieting a title on a home/property that was initially obtained by my father in a tax sale.

Pay it off and then buy a new primary and turn your current home in to a rental.

However, I am passionate about creating a micro home neighborhood in my area.

I believe the older vacation homes that have not been brought up to date will really struggle with occupancy and / or rates. 

It is usually used in conjunction with decoupling clips and the like for listening rooms, audio recording rooms and home theaters.

Also any tips for automating this as much as possible and how to protect the property financially and property management would be appreciated.I ALMOST understand the rental arbitrage strategy if building a company scaling with say 30 + units and looking for high short term cash flow.  

Competition with owner-occupants and the age of the homes (70-120+) will squeeze your margins and expose you to a fair amount of risk.

Quote from @Fred Scott: Sunrise Capital Investors - Mobile Home Park Investment FundI've seen a few posts about them here but none of them actually talks about what the actual annual returns have been.They are advertising heavily for passive tax deductions which is fine but what are the actual returns over a period of (say) five or ten years?