I don’t know how hard th IRS would frown on it but I’m sure it’s done all the time out in farm country. 

Making sure you are doing this in a house and community that will warrant it too. 4.

You could also get a line of credit for about $150k (you should be able to borrow 75% of the value.)The reason I suggest this is…1) you save $40-$60k in selling costs. 2) you have a lower blended interest rate (2/3rds at 3.25% and 1/3rd at 7 or 8% instead of the whole $500k at 7 or 8%) saving you another $1k/mo in interest. 3) you only pay interest on that $150k when you actually use it, not from day 1  Unless you hate this property, or want to buy something you can’t afford without selling, that would be my plan.

I'm not sure if the contractors are trained to exacerbate every single problem or not.We recently discovered asbestos in the compound joint.

But I would also make sure that you get a sewer lateral scope done to ensure the cast iron piping is in good shape. 

Using a HELOC for the down payment on the second home might be an option, but lenders may require you to wait a few months post-closing on the multi-family before approving new loans.The BRRRR-style approach could work if you can renovate and refinance quickly, but make sure the timeline aligns with your lender’s requirements.

Not sure what collateral means2.What do you mean by "listed correctly" as in reporting the rental income on your taxes?

Not sure how many PMCs you've had bad experiences with, but we'll take exception to:"Then do a thorough research on tenant applicants (note: leaving this to a PM may be hazardous to your financial health)".BP seems to have more threads about screening mistakes by DIY landlords as opposed to PMCs.Now, if you'd have mentioned Maintenance, you'd get no argument from me:) Even the PMC industry acknowledges maintenance as one of the biggest challenges.Rereading my post, I kinda see how I sounded negative toward PMs.  

I make sure I screen each potential tenant thoroughly (background and credit checks) and require references.

Surely they're collecting most rents, even during COVID.