Yes, the government pays the Section 8 rent timely, but more and more tenants are having to pay a portion of their rent.

Nor would I pay retail for a property with that low proforma return even though I like PR.  

Make sure you talk to a Banker or Loan officer that is well versed in both SE (Self Employed) income and also Non/QM programs.One tip I will give you as a Banker is open up a "Business Checking account" and for the next 12 months pay "Everything" out of that account. 

Note: We do 50+ investment property loans a month and the most important thing I tell BUYERS of properties being sold as or soon to be STR is make sure you are paying the market price per square foot and do NOT buy based on income approach/CAP rate.

Get on a budget, build your emergency fund, pay off all debts, save up.

@Matthew Cook I would NOT pay for the renovations unless I was on title or had a very formal contract written about the split of profits.

*As a side note, I think maybe it would be fun also to try and identify where new technology or machine-learning driven approaches could increase efficiency in the spaceAs for my financial situation, personally, I have around 50k saved but 20k of it is tied up in assets I don't want to pay capital gains tax on.

The perceived value may be more, because you know an STR was run there and making money, but a lender wont value it more.While I agree a lender probably won’t value it more, an investor interested in running it as a STR will pay more.  

@Sunny Wu of course the tenants don't want to pay!

I think the LLC also makes it easier to open a local bank account, which is convenient to pay utilities or other local bills or your property manager, etc.