@Ken M. if the Morby's subto wrapper cant payoff the underlying 1st position loan when it's accelerated because of the sale, then he/she would have to liquidate the wrap note (by selling the note) to generate the cash to payoff the underlying.

House Hacking a primary residence is the best way to generate wealth so I always recommend that as the next move. 

I like the idea of STR as it seems like it can generate significantly more income than LTR and would allow me to block out dates if I have friends or family come visit.

There will also be many homeowners who have had the properties in the family through generations and own free and clear but now still need to obtain a construction loan to rebuild. 

Now this is an annual thing (for all new properties).For rough math, you can generate a tax write off about 15-20% of the real estate value: one a million you can expect a $150k to 200k write-offs.

From day one I treated my involvement in real estate as a real business.This means, I had an advertising budget, a lead generating and follow up process, a back end process and money source and above all an experienced mentor.  

Based on my experience of running properties, even if the build were to cost you as much as $600k but you could generate $125k/year, you'd be very happy with that investment. 

Buildium streamlines the process by generating screening reports for us.

Your specific variable expense assumptions are wrong, BUT you stumbled into them being correct overall.Also, you are approaching this correctly - entering in the numbers to generate a purchase price that meets your metrics:)

If I choose the rental, then all income generated will be taxable income moving forward, because none will be off-set by the interest I could deduct.