You're going to pay taxes (regular income / short-term capital gains - both the same) no matter what.Double closings do have double closing fees, though some title companies won't charge a full double fee because, for example, they don't have to do the title work twice.If you're trying to prevent the seller from seeing what you're making, you can do a blind hud, or blind disclosure, or whatever it's called. 

I'm not sure if this is a good or bad idea, or if I should just stick with a regular tenant for my first rental, as I've got 3 other decent applicants. 

I am W-2 and I pay full mortgage for my regular live in house.

This is much less costly than an Attorney to settle the issue once you are clear on what the rules state.Your HOA PM should be enforcing the current rules regularly and equally for all.

At the same time, 2 minutes' research shows that the regular cost is above $500, and that's the ballpark I heard from several attorneys I contacted. 

@Jeannette Tang A great way to house hack these days is to rent a 2-5 bedroom unit and Airbnb the rest of the rooms to other guests, the cash flow will be very high compared to a regular rental property, but it will not be comfortable doing it with a spouse because there is not a lot of privacy.

You may find they are behind on rent regularly or that they have unauthorized pets or people living with them.

Any good investor friendly agent is looking for more of a partnership than just a regular client relationship.

They often get less in rent increases than anyone who we were doing regular fixed leases for, because we have the flexibility to raise rents more or less any time if the situation arises, whereas with a fixed lease we're going to include an automatic rise because we have no way of knowing what the next 12 months will bring. 

This is due to bonus depreciation which allows taxpayers to deduct 100% of qualifying property costs in the first year, in addition to regular depreciation for new construction and improvement.