So by utilizing leverage you earned $200 more.  

Is there a way to utilize part of my Traditional IRA funds as a down payment on a SFH investment property without being penalized?

HOW TO SHARE UTILITIES 101You have a property with two or more units and the utility meters are shared.

Tenant pays all utils except water.  

To minimize capital gains tax on the sale of their primary residence, your in-laws can utilize the $500,000 capital gains exclusion, potentially explore an installment sale to spread tax liability over several years, or consider converting the property into a rental to use a 1031 exchange for tax deferral eventually.

My thinking is that by renting to a residential care facility I can effectively utilize all the space, earn above market rent, and help provide a needed service, while avoiding tenant parking jams. 

This property is gonna cash flow over $1000 a month after we're all said and done with utilities mortgage and more.

Did they also do utilities and roads, or was that left for builder? 

Many Airbnb guests will want common utilities unless it is in a remote are where you go as a sot to sleep while hiking the area. 

Another option would be to utilize a property manager to manage everything and keep a buffer between you and the tenants.