The baked in assumption to "continued cash flow" is that you stay profitable.

This also gives me solid staying power when maintenance costs arise. 

Look for CPAs who stay abreast of evolving tax codes related to real estate and possess a comprehensive understanding of deductions, credits, and depreciation strategies unique to the industry. 

The substitute of collateral was more of a scenario where you sold for $155K, and instead of paying off the $88K loan in your scenario, those funds stayed at the title company and were used on a cash purchase happening nearby in date. 

They've also said that you'll need to show something to prove that you've had at least one 2+ day guest stay in the last 6 months (to be grandfathered in), and recently have assured that your permit will be transferable should you sell the home.

Attend seminars, join online forums, and read up on the latest market trends to stay informed.Remember, real estate investing is not without its challenges.

Being clear about what you want to do from the start not only helps you stay on track, but it also makes it easier to spot problems or delays before they happen.I totally agree that talking to people is important.

As far as benefit to the seller goes, @Matthew Paul I think you are probably right on the money and regardless of whether they would have preferred to stay in this house rather than move, it is likely providing them some excellent cash flow; and I'd be hard-pressed to come up with a deal that serves both parties better than the current situation. 

And while yes, no one has the same pricing (combination of factors), I also continue to check on a regular basis our rankings and how we "present" on total costs per stay vs. our competitors.My gut says there is price creep and we might have a ways to go before the market really corrects.

She can use that money to get a hotel room or short term rental....or stay with family or friends.