I wanted to start tracking my daily hours in the business and wanted to understand HOW I need to do this so it gets approved come tax time. 

If you consistently analyze properties, recognizing a good deal will be much easier when it shows up.

This will get you 90% of the way there and should be sufficient.It works the same in a saturated area, it's just more to sort through.You are aware that STRs in Denver are allowed only in certain zones and you must live onsite?

I imagined that to mean that a 1920 home with no renovations would cost more to insure than one updated to 2024 specifications.Is this something that is just "known" to flippers/renovators and I am just coming across it?

Keep the great content coming!

If your willing to do so, you can live in the casita and then rent out the main home and have your tenant pay the majority/all of the mortgage (depending on what type of deal you find obviously). 

At this point since it's after the fact while not totally correct; you may explore adding the missed asset/basis amount as a selling cost to just reduce your gain. 

You'll likely also reduce your cost of living by moving to a stabilized apartment.Depending on the cashflow and debt paydown, you can use this strategy until you've built enough equity to reinvest.On the other hand, getting into a multi-family after refinancing will also help you build substantial equity to rinse and repeat in the coming years.

The process has been difficult and stressful and we almost gave up a few times. 

Quote from @Steven Diaz: Here are the prelims.