My CPA says STR "A" can only deduct expenses for STR property "A", and only up to income level.

If they are simply joint owners of real estate through a partnership, his w-2 hours would not help for REPS status, they would hinder as TP would need to work more hours managing their personal rental properties than working at the w-2 job and meet 750 hours managing them as well. 

How many rentals are in the immediate area where you want to build up the business? 

Great job up to this point!

But you also have to subtract utilities, turn costs, starting items (kitchen and cleaning items you give them), and furnishing upkeep/maintenance.

But to qualify for the best mortgage rates, your score must be at least 740.A minimum loan-to-value ratio of 80%: Generally, lenders will loan up to 80% of the total loan amount.

Few property owners would be willing to (1) “tie up” a property for 10 years where they couldn’t sell it and (2) give up 10 years of price appreciation for $5,000.  

Heating costs go up in winter, as does electricity due to the reduced natural light and more people indoors.

I did it for a number of years and typically picked up one property per year. 

Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments.