I would tell you room count has little to do with what the IRS will accept as a legitimate write off.

If you get an accepted offer, inspect the property. 

Here’s my situation: I’m buying in a very hot market, so knowing it would take a few tries to get an accepted offer….I’ve been working on getting a HELOC at the same time I was offering on houses (we have a lender and a pre approval budget).

A property manager should help you to stabilize your newly acquired property, I'd be careful with a turnkey company who overprices the property and then provides crappy management because they just accept any tenant who will pay the highest rent so they can sell you the property for more based upon cap rate.

Given the current market conditions, you could have an easier time getting an accepted offer if you target properties that have been on the market for 2+ weeks instead of going after properties that are fresh on the market.

The majority of the stories you hear about people getting burned are people who were convinced to skip inspections or accept the problems in them.

Or would it be better to leave the program and accept conventional tenants at higher rates?

We accepted it and inspected it assuming we would carry over with their lease (month to month) and they deposit would cover all the repairs.

Seller doesn't want to accept many questions however regarding hvac and gas systems.

If a Tenant tells me that he is terminating the lease early, I just accept the fact that the Tenant is leaving.