Also, bitcoin in this instance is a pretty glaring red flag.

Just don't change your address to your parent's house, that would throw up a red flag. as long as that remains your primary and you aren't renting it out for at least a year after purchase, there shouldn't be any issues. 

My house in Redding, CA has been rented out the last 4 years to Serenity House in Redding.

My questions for you all:Is there red flags that you look when searching for a house hack deal?

Fortunately ours was not red tagged but both times had heavy damage (but less than most properties).  

Each hurricane red tagged about 50% of the houses on the beach and had to be rebuilt set back from the beach.  

We had meetings with him about we our business finances are in the red, not making repairs unless its a non habititable issue or saftey concern.

Unfortunately many lenders will see this as a red flag and may not take the risk to lend you the rest of the money even if you use stated income program or bank statement program but those are for self employed borrowers who have active income from their business but write off to many expenses that when filling their taxes their net income is really low or sometimes negative.

Has anyone dealt with section 8 renters before and if so what are some red flags that I should keep an eye out for?

With a Red Lobster at 6.55 rate in 10 years with increases you would be right at an 8 cap.