Basically, there's no free lunch when it comes to taxes.Depreciating property lowers your tax basis.

Possibly lower returns than projected because of statutorily mandated interest rates following court judgements.

Getting a loan to payoff another loan with a lower interest rate doesn't make any sense. we do private lending and can get double digits returns consistently.

There are some pockets in this lower price range but they are hard to find and sellers won't let them go for the price you want often. 

If I were you, I'd pass on this property and look for something else (and I suggest a 3 BR) under $80 that you can put a little rehab into, unless insurance pays your family member a bunch of money and they accept a much lower price. 

Rentals are extremely difficult to make pencil right now but would only personally consider higher end projects because the costs are far easier to absorb than trying to build in lower value neighborhoods.

Many states have discounted property taxes and lower yearly increases for owner occupied properties.

I don't charge renter's insurance for my lower class properties.

I would tell people today that if you buy a primary residence expect to stay in that home for atleast five years, especially with a FHA loan which has lower down payment as the current forecasts for home appreciation or very low which with closing costs on the buy and sell, it will take several years to have equity in the property and enough to be able to sell, so that is something also to consider.

Most hosts just lower their prices when things get rough but guests just want am interesting experience.