You also pay less for an HO6 insurance policy versus HOI home owners insurance costs. 

My only reason for seeing this as a viable option is that there may be more options to compare when looking on a nationwide scale versus solely the options in just your local market.

You can't really even start answering the question without that information and more, because the optimal renovations you would do for a newly-acquired property would be quite different based on your answers to those questions and of course, your goals, both for the property itself but also your role dealing with the property and with real estate in general going forward.How would this deal differ for a buy & hold versus a BRRRR at a high level?

Understanding sub 2s on the surface level now, what are some of the pitfalls or dangers of using this strategy versus traditional all-cash purchases from a seller?

Even if you can claim 2 of 5, the taxes gain is prorated based on the percentage of time you occupied versus non-occupied and the depreciation claimed is taxed.

Keep in mind that STR income will likely not count in your favor until you have tax returns to show it, versus a bank may consider lease income on a LTR.

Plus you won't need to liquidate all your properties if you need only a couple hundred thousand versus having to sell your commercial property. 3. 

Build versus sell; what is your risk aversion? 

Pick a piece of ground that is more of a rectangle along the road, versus a rectangle deep away from the road.  4. 

In my market, Section 8 properties are eligible for rent increases at end of lease.  60-days notice needs to be given to the tenant so contact HUD sooner versus later.