I agree with everything @Michael Baum said.Many people, including myself, have used a 10% down second home loan to buy a property used for a STR.

The AAR does NOT include dividends.

Your net income includes equity from debt pay-down.

Everything should be done in hosue, including owning the property, renovations, and management!

Based on the above is my understanding correct and the 45 day identification period and 180 replacement property purchase period (which includes the 45 days) both extended?

This includes converting it to a rental property or refinancing into a different kind of loan. 

The good news is that these properties can indeed be purchased for various investment strategies, including rentals, BRRRR (Buy, Rehab, Rent, Refinance Repeat), or fix-and-flip projects.Purchasing as a Rental or for BRRRR:You can acquire a Freddie Mac home to hold as a rental property or implement the BRRRR strategy.

32k or even 42k on a half million dollar house doesn't sound all that good.What's your projected cash flow after all your expenses including a likely higher mortgage payment than the current owners?

Portfolio = Income derived from financial instruments like dividends (including REITs), interest, royalties, and capital gains.Mostly income w/out loss potential, and favorable tax rates.Cap losses may offset cap gains w up to $3,000 loss.

But I agree with @Stuart Udis - when making offers on occupied rental property, I always review the Financials including the RR & T12.