Already a co-owner of  single family home with shared common space and bedrooms rented to individuals.  

It’s a scenario many real estate investors find themself navigating when balancing capital gains from property sales and K1 losses.Based on what you’ve described, it’s essential to understand the relationship between passive and active income.

General advice is welcomed as well but what would you plan to do in my scenario?

It's common when you do these water payments that a few will pay the rent but not the water bill in protest.   

Essentially a land flipper is actively seeking out properties to buy for a bargain and then aggressively marketing the piece of property to turn a profit.The flipped land can be sold for cash, but more commonly, flippers make money by offering the buyer financing and allowing them to pay the land off over a set period of time, with interest.

(in fairness, this is not super common).  

Over time, Section 8 rents did not keep up with market rents for my properties, so I slowly converted them to market tenants.Pros of Section 8:You are likely to have families as tenants, so it is more common to have long-term tenants.These are lifelong renters, so you don't get calls for stupid stuff that really should be tenant's responsibility.Most are used to slum lords, so simply being responsive builds huge amounts of goodwill to you.Cons:the biggest one, for me, was the annual inspections.  

It wasn’t a perfect scenario, but it allowed him to walk away without losing his shirt.

So, if that is a good scenario or not would depend on the whole picture. 

Is such a Finder business model common?