More like one person on the HOA is opposed.  

Quote from @Irina Badal: I heard for anonymity purpose it’s advisable to set up a personal residence trust.

I'm not a professional Tax person.

Personally if you are looking to grow in real estate going the traditional method/way of getting good properties under agreement with traditional financing will get you to where you want to go faster than trying to find all the needles in a haystack.

Under any scenario, any state, someone who sits on their rights and lets someone get into the weeds to the benefit of the person who sat on their rights, will NOT have those "rights" enforced by the courts.  

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Here are the details:Purchase Price: $300KDown payment if taking mortgage: 10%Available cash on hand: $40KEquity in Primary Residence: $700K - $1MSecond Home will need $10K initial investment to freshen up for personal and STR use.Assume equal rates for each product? 

David, do you know any Hard money lenders that would allow a person to wrap their loan without doing a balloon? 

You must report rental income on Schedule E and can deduct rental expenses like repairs, maintenance, property taxes, mortgage interest (allocated between personal and rental use), and depreciation for the rented portion.

I personally think it really depends on how much value will it add to the property and if the town will allow it.