However, there is no way to do so without risk.The Internal Revenue Services issues three (3) Private Letter Rulings (PLRs) that allowed the taxpayers to do just this.

The 1% "rule" is not a rule, it was a simple guideline that was supposed to help do a quick initial vetting of a deal.

Its hard to reach the 1% rule here now. 

Is it not so much the fee for filing that makes it prohibitive but that the equity offered rules out the viability of being a GP in a registered security this way? 

@James Anderson, as a licensed real estate agent, it's pretty straightforward, and I assume my take will be similar to that of other agents. 

I made that mistake with a 2 bedroom condo - after 1 year, I had to shut down operations due to HOA rule violations of NO short-term rentals less than 30 days.#8 The 30 day+ rule -  Certain places Airbnb is outlawed or a softer rule is the 30day+ rule.   

The 1% rule is a simple rule which is easy to calculate and describe.The Market Analysis IS the screening rule. 

Thank You for the input, it's confirmed there is not a straight forward traditional mortgage option.I'm looking for a property in the 100k range.

Does the lease also state that the tenant must follow the HOA rules? 

If the tenant is from another state, a background check cost of up to $25 may also apply (sec. 704.085).It is unclear to me if I am actually in breach of this rule by charging the tenant more than the $25 limit, even though it is through a third party.