Our Teak is for the overseas market so not dependent on the Belizean economy. 

Depends on the lender.If it has yet to go to foreclosure and you are trying to buy it prior or at sale - the answer is a hard no. 

Meaning the folks sitting at sub 25%, probably 20% DTI with cash still on hand to buy properties but choose to leverage.

A phase 2 may be required depending on the outcome of the phase 1.  

It will all depend what you feel comfortable in terms of budgeting and the type of repairs needed.

If the title company requires that you become the Manager of the spoke LLC, you would have to amend the Operating Agreement, and, possibly, you will have to amend the Manager of the LLC with the Secretary of State (depending on the State).

All depends on the interest rate on the primary home and if fixed.

For instance, depending on your location insurance costs could be much much higher than indicated in the book, construction costs are a lot higher, etc. 

As noted in articles Michael noted, this may or may not have any real impact on your taxes, depending on if you have any other passive gains/income to offset.  

Is there strong demand for rentals and is it potentially possible to rent a room for 1500-2000 depending on the location (slightly cheaper than a studio from what I've been seeing which is how I priced my rooms in AZ)?