@Jorge Vazquez It is really good if you want to scale up quickly as you do pay a heavy price when you buy back the equity but it is good to pay back within 3 yearsThis explains betterhttps://www.cnbc.com/select/what-is-home-equity-sharing/#:~:text=Home%20equity%20sharing%20allows%20homeowners,when%20you%20sell%20the%20house.

Just do a house hack.

Do you frequently require subcontract and vendor engagement (lawn care, snow removal, building maintenance, management company etc.) and if so, do you sign contracts and require that you are listed  as additional insured on their insurance policies? 

If you have extra cash, then do it.

Sometimes you do lose money in RE and this looks like it is one of those times. 

Do the taxes and insurance on this property count against my DTI (No escrow account required) 2.

Your savings is good, but your income won't support that many properties if you do them wrong and need to carry 15k min reserves for each one.Focus on what the next property should be, maybe upgrade to a two-family and see how that goes.

Do I need to ask for screening of every one living or only persons signing the lease?

If you search here for Do Hard Money, their previous name, you'll get a thousand hits.The consensus reads mostly negative to mixed at best.

I never heard of option 1 and I have been doing this for 20 years.