Depending on your tax profile, you may be eligible for a Solo 401k, which is the optimal self-directed retirement account for real estate investing. 

Once registered, select Submit Financial Statement from the Main Menu. 

Essentially, I'm not concerned about saturation levels, as nowhere in the world is everyone doing it in the most optimized way, with the top performing properties.

This is based on your numbers and I don't share your optimism that a 1/2/3 12 unit mix will bring in $12,000 per month there.Try to find a local partner with experience doing the building.

If there's a city that is trending toward 20%+ population growth over the next 10 years, especially in an optimal demographic mix, that's a pretty safe bet for solid appreciation.

You may confidently handle the process of transferring your house hacking property to an LLC and optimize protection and advantages by collaborating closely with a real estate attorney, tax adviser, and other experts.Good luck!

My suggestion is to make sure it's a house that other students will be in line waiting to help you keep it rented when/if you move on to another area, or town, and one that is very close to campus (walking distance is often optimal, but not an absolute necessity) might be helpful, but I believe making it an attractive-to-students house is important.... 

What is your take on the most optimized property type to invest as a short-term rental in Kauai. is it 2 bed/1 bath, 3 bed/2 bath.

If you're looking for STRs on the beach, you'll have difficulty finding something that cash flows unless you can get optimal occupancy. 

Now obviously those don’t tend to be the same, but it does mean that when I’m looking to optimize my returns I care about the overall cost of the financing, not the source.I monitor my overall debt to equity ratio to make sure I don’t end up over leveraged.