Much of it based on defense spending that will likely increase as assets are moved from Colorado to Alabama to include the Space Command HQ.

Currently we are seeing STR owners posting for sale due to reduction in prices they can get per night and the vacancy rate increasing. 

Perhaps if your partner was a general contractor or handyman type there may be some merit there to reduce costs / increase profitability.If your partner enjoys deal sourcing, a better move might be for him to become an agent - so he could legally collect commissions from finding deals and managing properties for multiple people. 

Or is it calculated daily and the base rent increases after 10 days when the late fee hits the account?

This is where your focus should be, not buying section 8 rentals or focusing solely on increasing your portfolio by 2x, 3x etc.

Borrower has the 3% loan in place for the duration, and 14% investor can be paid off with increased rent in say 18 months.  

And this will only increase in my opinion so it's a great time to invest!

They become renters, MASS increase of renters.

I’ve had people who signed up for 6 months and stayed 5+ years, paying increasing rental rates.

It's tempting early on to leverage as much as you can so you can do more deals and keep liquidity, but increased cashflow especially with PMI will make you sleep a lot better at night.