The benefit of a permit and inspections is to have an independent party verify work. 

With 4 properties in different location, you have 4 time more chance of RE appreciation.To maximize returns, leverage tax benefits like depreciation, mortgage interest deductions, or cost segregation while considering your ability to handle management demands and market fluctuations.

When I signed up with Gator, the first step is signing up with PCS to get LLC and things set up and I got a HUGE discount to use their services (another benefit of gator).

I don’t think you’re getting $2k worth of benefit, much less $16k every single year. 

Without house hacking, your figures would look like this:$1850+1850 = $3700 - $1500 - $3200 = $-1000 net in your pocket (let's skip principal paydown and tax benefits for now).With house hacking, your figures would look like this:$1850+650+1500 = $4000 - $3200 = $800 net in your pocket. 

I believe subject to transactions, done CORRECTLY, between KNOWLEDGABLE participants, with FULL DISCLOSURE, are typically successful transactions that have benefits for both sides.  

Alternatively, do the risks outweigh the benefits of $500+ cashflow plus 30% day one equity and less than 2k out of pocket?

Nothing is 100% passive but if you work with someone how has already built a team you can benefit from their experience. 

This means you'll want to "write off" expenses related to a property you have in service because if those expenses don't benefit you this year they could in the future once you sell the property.We can get into a lot more details with the "if" "and" or "buts" BUT I think this would be the "simplest" answer without diving into your specific situation here.I hope this helps! 

Quote from @Ian Ippolito: Quote from @Michael Plaks: Quote from @Ian Ippolito: Quote from @Rud Sev: 3) Unless you're doing a 1031 exchange  at the end or similar tax structure to defer taxes, you will have to *pay back* all that depreciation benefit at the end (on sale...which for you is in 5 years)  via depreciation recapture.