STRs sound like too much work to me.Portfolio income = stock dividends, interest income (from banks, credit union etc), Master Limited Partnerships (Form K-1), Business Development Companies (Form 1099), bonds, interest earned from investing in a real estate debt fund, interest earned from being a private lender

My advice would be not to be pound foolish and penny wise, spend the money now and sleep safer. 

So it isn't a complete waste, you would simply need to follow the strict reading of the law with no private clauses for consideration...I'm not sure how that plays out since technically if the lease is void, so is the tenancy meaning you could terminate anytime and not wait for the original lease expiration...I'm sure that's covered somewhere, but again I'd ask my local atty what to do given this is such a locally specific issue. 

Also, how to prove "Spend more than 100 hours on the activity and no one other individual spends more time than you do"? 

Unfortunately I spend a lot of my time right now finding different carriers for clients just because their current company is purposely shrinking their business. 

I talked to an investor agent and she asked how much I'm looking to spend on first home (with rehab).

That’s how much you have to spend on 1-3 replacement properties (to keep it simple)2) How much equity do you have in the property?

I have about 250 questions I ask a sponsor and spend probably 10 hours easily researching them.

It's a high end property and should be expensive but it's not providing high end amenities that people want when they are spending 3-4x the median home price. 

They’ll send someone to look at it and (hopefully) help pay for the repairs, but you'll likely want to use an aggressive private adjuster that is going to advocate for YOU.