You lose $3K and a some time/effort...that's a small price to pay for the lesson you've learned, and to (hopefully) stay out of legal trouble

Not sure wasting our time, the IRS, or the time of a skilled lawyer, is worth the effort when the numbers look hard to achieve (and be IRS accepted).

Put in the effort, build relationships, prove your value, and improve your odds of finding someone to help launch you on your path.

Now, having said all that, house hacking isn't necessarily easy (if it were, everyone would do it)...it's just easier than the more advanced strategies...House hacking still takes significant due diligence, skill in analyzing the market and the property, time and effort to learn about tenant screening and property management, the ability to anticipate appreciation/depreciation trends, etc., etc., etc....and even with lots of skill and preparation, things will still go wrong (vacancy, plumbing leaks, bad tenants, etc.)

@Cameron BrennanI looked into this on the past and it did not make financial sense for me as the incremental amount you would be saving was not worth the effort.

If you're not in a rush, and you can wait, then you'd be able to focus most of your effort on bootstrapping your new business.In an effort to help persuade your wife to toughing it out longer, try explaining that if yall stick to option three, you could potentially get a bigger/better new construction house later *and best part of all* another horizontal income stream (i.e. rental income).

So, in summary: it is possible to get cashflow, but it's just not something that can be had without some effort and sacrifices...you have to go where others aren't going, and do what others aren't doing.If it were possible to succeed at RE investing by buying turnkey, A class, perfect properties with no flaws, then everyone would be doing it!   

It's different if it's a large multifamily complex that pays the PM a lot of money, but assuming it's just a single house or small multifam, the considerable amount of effort to manage it is not worth the relatively low amount of money the PM is making from the property--and that's why your PM is ineffective.

If you can make it a genuine experience of some sort with a theme, then I think you really would have something! 

However, it's important to remember that there are often local laws and regulations that govern short-term rentals, and it's the responsibility of hosts to ensure that they are in compliance with these rules.As the popularity of short-term rentals continues to grow, it's likely that we will see more efforts to regulate and enforce compliance in this market.