After all expenses I've shown a loss on my tax returns the last 2 years and it wasn't just a paper loss.

Yes, you'll be paying mostly interest rather than principal paydown starting out with the FHA loan hence the better play for you on paper but maybe not on the monthly.It's not too risky so long as you pick your market(s) and do your numbers right.

I would definitely plan on using credit cards for any purchases when I would go to keep a paper trail.

Also, when you are calculating returns, don't forget that utilities are in your name, you need to pay for internet and Netflix, paper towels, toilet paper, laundry and cleaning supplies, extra sheets, towels, pillows, etc.  

And on top of that, i am being told that even though the tenant has been living in my unit since end of June, and all the paperwork was submitted SEVERAL times over the last 7 months (with a paper trail to prove it) that they will not pay any back rent.

I was doing pretty well with my existing properties in San Francisco Bay Area and Indianapolis suburb, all Class A, higher income tenants, oldest property is built in 1957 and 1961 (local so I can check on these every week and they are all up to code) and 2005 (Indy Class A)I bought in spring 2023 a Class C property in Indianapolis for $130,000 which was supposed to cash flow on paper $176 a month at higher interest rate.

A lot of real estate in D and F areas look great on paper but come with a lot of unexpected issues.

You need to create a UNIQUE value proposition, and in the world of STRs, that not only comes from many areas: namely the property's ability to capture attention on the platform and the guest experience from response times to questions or booking confirmations, to comfort of mattress and towels, to enough toilet paper being on site, through to checkout requirements.

Go back and look at your loan papers and look for the mortgage insurance disclosures and how that is calculated. 

We had a window like this,  first couple of years we put a towel bar over it and  cut a little shower curtain to hang from it.