0 Chance.Cmon, pay for insurance or just don't own real estate.Trying to gain an extra 2-3% ROI and risk your entire principal is just stupid.Don't be cheap, get insurance.

Single Room Occupancy (SRO) or PadSplit / CoLiving are able to make a ton of income, especially if you modify the house with a couple extra bedrooms. 

As mentioned if the holding company is not solely holding or owning assets together funneling monies as a loan would further complicate if there is a default but also cause you to file extra tax returns = $...Yes you are taxed on interest income or any money that you make, does not matter how you structure it, what comes into play is not how much your taxed but how much you pay someone to figure out for you how much you need to pay and each layer is an added cost. 

Most people who buy 2+1 and think they can use the third and get busted on that, end up renting the bonus unit to the top or bottom unit as extra space, but that is a loss on what would be unit rent by more than half.

On a fixed mortgage, i could pay extra payments (or a one time lump sum payment) and apply it towards principal.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

Here in Colorado Springs and Denver they are called "habitat for humanity" and they get huge slabs from folks renovating.

If they can't/won't pay the increase, reward them with an extra 30 days to move.

Townhomes have extra holding costs in HOA and could limit your renting ability.

There is something to walking into a room where 95% of the folks in that room are interested in MF syndications (5% are lost, in the wrong room).