I haven't heard of any property managers in any market that will manage your short term rentals but I could be wrong.

If you’re referring to the “newbies” with $10k to their name that watch a video by Pace and get excited and pay for joining, go out with their last $5k and do a sub to with a “desperate” homeowner without revealing all the possible consequences (because they are unaware of the consequences through lack of experience and lack of knowledge and or choose not to inform the seller) then I agree, it’s probably going to turn out badly for all concerned.If on the other hand you’re referring to a seasoned investor with excellent credit, significant cash reserves, who wants to add a property to their portfolio without going through loan qualifying, and can pay enough to give the seller “walking away” money because of the low existing interest rates and or, and is dealing with a informed seller, then I find nothing wrong or negative about the transaction.  

Personally, I'm not interested in owning anything that doesn't cash flow at least $500 per month because there's just too many things that can go wrong in REI and I want the properties to earn their keep both in appreciation and in cash flow.

This doesn't mean you should because out of state investing for a newbie is difficult and if you listen to the wrong people can really burn a whole in your pocket.That being said, if I were you, I would likely diversify my assets.

What am I missing or doing wrong? 

I could very well be looking at this wrong.

Don't get me wrong TK is good to start but for people with 100k+ it is not a scaleable asset class.

You must use a PMS and for the software to work you'll need to own the listings, which means you'll need to also collect all the funds, so owners' rents don't get deposited in the wrong account (Yes, Airbnb makes that mistake all the time!!).

What am I doing wrong here?

There are lots of things that can go wrong for which you should have reserves.