The photos are of the park it overlooks, the backyard and the house (on pg.4)My Goal: Live rent free and earn some cashflow on the side. 

Because it's still possible for me to earn a higher "risk adjusted" rate of return on my capital.

So far, I plan to create an LLC in Rhode Island, open a business account and a business line of credit, have all the earning and bills from the short term rentals go into said account, and have the LLC sign a lease on each of our properties (which my wife and I will own under our name) and then transfer the earning after expenses from the LLC over to our personal bank account.

And, to deduct the health insurance, you business needs to have an earned Income.

I'll save it and reinvest until my rental income matches my earned income.

In my area, about an hour outside the city, there is a small property on the MLS recently reduced to 40k from 60k. at 40k the numbers seem to work well sans cost of repairs. it's been on the market for over 200 days.

You can do it yourself but you want to tread carefullyThe difference is that the IRS gives a lot of extra scrutiny over arrangements like this because it is very easy to create a step transaction and reduce the arms length nature with the unrelated party. 

If you are under value you should NOT reduce your rent.Good tenants are typically good pet owners.In our state we can accept a pet deposit (which I make refundable) and we can charge pet rent.I would keep the rent the same, lock them in for another year and offer them a pet addendum with an additional security deposit (100% refundable) and some pet rent.

There is no return on that. 2) retirement acct- Save 200 is saved plus you earn market return. 

From there you could rent out bedrooms to others while you still occupy the home to reduce your cost of living.