Because it's always set to an attractive level.

I have a 3 level property with finished basement.

In the nicer places, we use Corian or solid surface, whereas the mid-level places a cheaper solid service pre-fab such as laminate.

The Financing: I went through the typical Internet Search and found 5-10 mortgage lenders all of which rather scoffed at my numbers originally because they did not really work with investors; they just went through typical channels saying that I would have to put 30% down and that I would need to get appraisals and approvals at every level.

Depending on the size and stabilization levels of the property, you may have options for Fannie Mae / Freddie Mac loans. 

Purchasing an investment property increases the level of difficulty of your tax return.Purchasing a house-hack is even more difficult.To make it even more difficult - you plan to make improvements so you have to determine which costs are currently expensed and which are capitalized.Not only have you acquired an investment property but you also acquired a personal residence.As a result, direct expenses towards your investment property and indirect expenses are deductible business expenses that can be used to decrease your net income from rental activities.With all that is said - you are trying to operate a business so I would hire professionals to help you with your tasks.

The contractor must be FHA qualified and will be paid in installments (called draws) when certain levels of completion are achieved.

As mentioned, you might be able to drop some road base and raise the level of part of the property to raise it up out of the flood plain. 

I would ask your CPA at what level he/she thinks S Corps make sense. 

She quickly went to find someone else to talk to.Lots of folks renting out STRs these days are upset by the level of recent competition in the marketplace.