This makes it to where I will not qualify for a traditional loan.

Landlord determines the amount they want coverage for, typically the same as a traditional deposit. 

The Pro-Rata rule applies if your Traditional IRA contains both pre-tax and after-tax contributions.

The tax benefits are also great.Where interest earned from lending personal money is subject to ordinary income tax rates, interest earned in a traditional SD 401k retirement plan is tax-deferred or tax-free through a Roth SD 401k plan.

Management of section 8 will cost more than traditional management so keep that in mind as well.

I'd recommend closing on a 2-4 unit property that needs some work but would still qualify for traditional financing. 

These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.  

I wonder that anybody from out-of-state investing in the KC area want to turn their traditional rental properties into short-term rentals?

Since you'll be living in one of the units, you can qualify for owner-occupied loans, which often have lower down payment requirements and interest rates compared to traditional investment loans​

Hopefully you can make a deal with @Christian Rodriguez on the whole lot.