A strict cancellation policy and never allowing Instant Book have worked best for us.  

In my city's codes and ordinances it states that one of the common rental property violations is having "over four unrelated individuals residing in a dwelling unit" would the dwelling unit be considered the entire house or just the part contained in the lease (aka the room)?

You have to know when your initial text goes out, because the response is going to be instant, and you better reply to their reply instantly, but if you don't know they are going out then you cannot make sure you are there.

Looking to start with house flipping and eventually move into multi-dwelling property as a more steady stream of revenue.

This implies that instant return likely will take more effort than in the recent past.  

As you may already know, the state of New Jersey is implementing a new Lead-Based Paint Law in Rental Dwellings (link below) starting July of 2022.

The main pro for building would be the ability to control where I live while living in the house, whereas most multifamily homes are within city limits and not my preferred choice of dwelling. 

Many companies will write 1-4 family dwellings. 

I spent way more than that on engineering school, and would do it again in an instant.

Do you need instant cash flow?