What strategies have worked best for marketing midterm rentals in secondary or smaller markets like Portsmouth?

This is not a great return, but not terrible.As others noted, there are other risks, like having the property insured at full replacement or purchase price, or if the option is 100% seller financing with no money down or very little, versus 20% traditional down payment, this can start to move it into a better investment.

Ideally, I would like to use the buy and hold strategy, with a 50k budget to get started.  

However, co-living allows you to acquire properties with as little as 0%-5% down, drastically reducing the amount of cash required.Instead of needing $100K+ to buy a rental, a co-living strategy lets you start with a fraction of the cost while achieving higher returns.3.

Sounds like strategy call would make most sense to see what your goals are with REI and being an agent to determine if the organization I represent aligns with the direction you are looking to go. 

Since this is the tenant's money, I want the bank calculating and holding everything versus storing balances in my spreadsheet.

Have you used the strategy?

It's been an awesome strategy for us.

I wouldn't recommend setting up an LLC out of state if you are buying in Tennessee unless your tax advisor is looking to help you on strategy.. but from a numbers standpoint, it really doesn't make sense when you start adding up on all of the annual LLC reporting fees from different states and then it starts cutting into your cashflow.

They must satisfy "material participation" test for their STRs to utilize the strategy.