My guess is, they con investors into $50,000 or more and spend it on their sub-par lavish lifestyles, making promises they can’t keep doing services they aren’t capable or legally able to perform.

I have a nearly perfect credit score and I'm gambling on that for my first project.

Hello Davin, i would not recommend you spend the extra money on a financial advisor at this stage.

My plan is to spend the next year saving up for a down payment and educating myself.My question is this (thanks for staying with me this long!)

The key factor is ensuring the property qualifies for favorable tax treatment by adhering to IRS rules regarding short-term rentals and material participation.For the 7-day rule, the IRS requires that:The average guest stay must be seven days or less for the property to qualify as a short-term rental.If the average stay is 30 days or less, you must provide substantial services similar to what hotels offer, such as daily cleaning or concierge services.Regarding material participation, to further classify the income as non-passive, you must meet one of the following criteria:You spend more than 500 hours actively managing the rental in a year.You manage the business yourself and spend at least 100 hours, with your involvement exceeding that of any other person involved in the rental.Please note there are actually 7 ways to qualify, the above two are the most common.

Yes, there is likely a niche traveler market, but the people that are really spending money on vacations arent going to want to stay in a small accommodation. most vacationers are bringing family and want a little bit of space 

They will likely just use their best judgement and not spend 100 hours researching the laws to make their decision. 1.

For example, I  never hear stories of the turn key provider spending extra sound proofing between units or investing in better quality fixtures or other high touch building materials so that the end buyer can enjoy reduced maintenance costs and better tenant engagement.

2) Why did you spend 10k on HVAC that still needs work?

If it is consumer spending or they lost a job and didn't figure stuff out that's a no go as I would be in the same boat if they lose their job again but I get medical.