@Derick Jennings House hacking is the easiest way to start and the best way to be profitable with low risk in Colorado @Koren Lavi can help you in the Denver area!

Sold it for a profit fairly quickly.

In construction, there is only so much you can do to reduce your margins while staying profitable.

Check their nightly rate, occupancy and amenities.That will give you a pretty good idea of need and profitability.

Renting  rooms is almost always more profitable than renting entire suites or houses.

What would a fair cut of the profits be?

Some of these strategies (though not all, and possibly not the most profitable) are the subject of constant discussion on BP. 

Here are some general guidelines: Lien Position1st Position LienEquityMinimum Down Payment of 20-25% (a 30% equity to sale price is preferred)Down Payment made in certified funds and not borrowedMaximum Funding of 70% ITV (Investment to Value)SeasoningMinimum of two monthly payments already made12 months or more preferredPayer CreditCredit Score of 650 or higherNo major derogatory trade lines (No 90-180+ days delinquent, foreclosure, repossession, bankruptcy, etc.)No decline in credit since purchase of businessTermsPrefer 60 months or lessMaximum of 72 monthsNo Balloon Payment preferredCash FlowBusiness has positive cash flow1.25 debt service coverage ratio preferred.DocumentationPersonal guarantee from a creditworthy individualStandard documents including Note, Security Agreement, and UCC-1 filing.Tax Returns on the business that substantiate profit and loss statements.OtherPayment history current and verifiablePayer Interview indicating buyer is satisfied with business and comfortable making paymentsMotivation for selling the note is not a result of a deteriorating businessConsideration of high risk businesses or geographic areasIn these situations, sometimes a partial is a better option. 

Paying off rental mortgages increases monthly cash flow but reduces liquidity, while investing in hard money lending offers high returns but is taxed as ordinary income.Buying a multi-unit rental provides tax benefits like depreciation, while purchasing a business can yield strong profits but requires active management.

@Ashly FrassoRenting by the room can be a profitable but complex model.