Keep up the great work of staying active on the site and letting the knowledge soak in :) Best of luck to you! 

@Stephen KunenProviding substantial services to your hosts provide suggestions that you should report it as schedule C as opposed to schedule E.Substantial services include but not limited toConcierge, meals, housekeeping, cleaning, entertainment etc.A pro of reporting it on schedule C is that losses are deductible and not subject to passive activity rulesA con is that income will also be subject to self-employment taxes in addition to income taxes.

I would say about 1 lead per month 2 if I drop off the first 3 months of no activity.

Although, it seems like a lot of effort to only make $500 or so bucks a month on a rental, well, at least if you consider that it's a much more active affair than buy/hold REI. 

We have a pretty active community in Raleigh.What makes you want to sell your townhome if its cashflowing well? 

My tired eyes didn't pick up the active violation dates. 

The ones who are active in the local market should also be able to provide recommendations for contractors.

No one in this forum is going to be answer conclusively either so your best bet is to speak with  a local zoning lawyer and also to the zoning officer in town in detail. 

I don't spend much time on Forums, but my nephew has recommended Biggerpockets to me as a real estate agent who would like to experiment more actively with investment.

The only problem is that you will now have a payment against it if you spend it (which you would on the down payment for property #2) and you will have difficulty (I think) refinancing property #1 in the future with a active HELOC on it.