Only interested in STR due to tax benefits unfortunately. 

If you property is in Detroit you setup a landlord account with the water company and any tenant that comes in opens a account in their name and follows them in your case it will be you and then a tax lien on the property they will get their money either way.

Everything has gone up in the last few years around this home.2nd house is $900 (property taxes increase yearly) now.

Are there any tax implications or mortgage barriers to building a home under the "second home" plan and then converting it to an investment property shortly after its finished?

I am eligible for a $156.00 a day stipend if I travel >50 miles away from my tax home.

Underwrite allowances for - Vacancy, Prop Taxes, Insurance, Utilities, Repairs & Maintenance, a Reserve Account, and Property Management. 

You'll want to make sure you understand the K1/tax filing implications because if you own very small piece of let's say 10 properties in 10 different states you would potentially receive 10 K1s (one for each deal) and 'may' have tax filing requirements in 10 states. 

Our house is assessed at 415000 and the mortgage is 269000 and not declining because everything goes to interest, taxes, and insurance, nothing to principal.

Not sure your area that you're investing in, but the perfect BRRRR are kind of hard to come by now in the recent years.. so have the expectations to leave some type of money in the deal..Big thing that I've ran into and I've seen other investors run into is running out of money doing the BRRRR.. as some or most times you have to leave a bit of money in the deal, folks usually run out of cash to continue to do deals.. especially in the recent years..But good news is.. as you're holding and cashflowing on the deals, there is always opportunity to recapture the equity, not to mention tax benefits etc..I also see some pitfalls in investors getting desparate for deals, so they get lenient on their number etc.. as they do i see some get backwards on some deals...

Principle, interest, property taxes, property insurance, HOA fee, repair reserve?