They have to live somewhere though, so it makes me wonder if the landlords that are providing housing for them are (illegally) turning a blind eye?  

I'll put a deposit blind, but i won't close blind.

House-hack often and aggressively (but not blindly or without a proper deal analysis)Read books, listen to podcasts, converse with people more successful than you every chance you get.That's what I did after going to college.

This way, I am not blinded by which side of town to stay on and miss something that is happening in other areas.

Fiance is kind of blindly on board at this point, trusts my judgement as a bread winner and knows exactly how badly I want to get out of the rat race. moving into a fixer upper is more than likely our next step. 

However, I will not be replacing the blinds, adding an accent color, or installing a better shower head to suit your personal tastes.4.

I purchased tile, carpet, appliances, windows, landscaping rocks, doors, blinds and paint.

Shame on you for turning a blind eye to wrongdoing.   

As an out-of-state cash flow investor looking for good cashflow and to build a portfolio, what are some of the blind spots I should watch out for assuming the guaranteed incomes from Section 8?  

The more blind offers you send out to owners, the more interested sellers will contact you, and the more motivated they will be to deal with you.